There’s not a Swedish meatball in sight, but from Thursday, Australian budget retail giant Kmart will launch its assault on big box homewares shopping.
Kmart, which is owned by $96 billion industrial conglomerate Wesfarmers, will tackle Ikea head-on with its new 3000-plus square metre store in Box Hill South in Melbourne’s east, trialling a new store format that, if successful, will be rolled out by the retailer elsewhere in Australia.
Kmart’s general manager of store experience Courtny Keeble said the K Home store would “bring Kmart’s online homewares offering to life”, allowing customers to touch, feel and experience products that had been previously unavailable in store due to their scale.
The store will feature Kmart’s own brand Anko exclusively on the shop floor, with just a handful of other brands to be stocked only at the tail end of the new retail experience at the checkout.
The new format, however, will not feature any previously unavailable Anko products. Its point of difference will be how items are showcased and styled, which management hopes will inspire customers to buy. The only categories customers will find missing are apparel, footwear, fashion accessories and toys.
Wesfarmers is one of Australia’s top 10 companies, generating total sales each year of just under $46 billion. Its other retail operations include Bunnings Warehouse, Target, Officeworks and Priceline Pharmacy.
In the most recent financial year, Kmart generated revenue of $11.4 billion. Wesfarmers estimates that Kmart sales account for about 10 per cent of Australia’s $34 billion home and living market.
Keeble said she was hopeful customers would embrace K Home, with “foot traffic, sales and broader customer response” to the new concept store to be management’s key measures of success. She would not expand on sales targets for the store, which has been secured via a multi-year lease.
While considerable social media hype has built ahead of Thursday’s store opening, retail expert Lisa Asher from the University of Sydney Business School expressed concern about the growing size and power of Wesfarmers in Australian retailing.
“I do not agree with how they remove competition from markets, then only see their obligations to shareholders,” Asher said.
“By outsourcing (manufacturing) to developing nations, which have very low labour laws and environmental protections, means we are polluting and exploiting those nations and people by purchasing these products.”
Asher called for transparency in sourcing, including where products were made and by whom. She also said she had concerns about environmental damage and sustainability.
“If greater transparency on sourcing was required under consumer law in Australia, it would fundamentally shift the low quality disposable products we pay only a few dollars for from Wesfarmers.”
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