Secret Kmart 12,000km from Australia
It’s just about as far from Australia as you can get, but an unexpected find in a major city could shock Kmart shoppers.
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In the basement of a grand department store in Canada’s Pacific coastal city of Vancouver is something very unexpected – to Australians at least.
More than 11,500km from the nearest Australian landfall is an icon of Australian retailing.
Stretching out across the store’s lower level is, essentially, a Kmart. Stacked floor to ceiling is Kmart’s familiar own brand Anko products you can find in stores from Devonport to Darwin, and Broome to Bondi.
But you won’t find a Kmart logo in sight. It’s a secret Kmart a world away from Australia.
A retail watcher told news.com.au, Kmart’s “unique” experiment could pay huge dividends for the Wesfarmers’ owned retailer.
Some Canadians have been circumspect on the sudden omnipresence of Anko. The prices also aren’t as keen as in Australia: Vancouver shoppers are paying more for their Anko than shoppers across the ocean in Victoria.
But that’s not stopped the Kmart lookie-like expanding across the country. By the end of 2024 Anko will be in every major Canadian city.
“Your average Canadian shopper won’t recognise that it’s actually from a brand down under,” director of the Retail Leadership Institute at Toronto Metropolitan University Jenna Jacobson told news.com.au.
Indeed, she said Anko’s encroachment was a “strategy that Canadians seem to be warming up to”.
The spread of Anko across Canada is the most striking example of Kmart’s ambitions to become far more than simply an Australia discounter. It wants to become the backbone of discounters globally.
‘Meet Anko’
It may be majority Kmart on the shelves but the sign above the door in Vancouver will be unfamiliar to Aussies.
“Meet Anko,” say cheery signs across the store. “Low prices day in, day out. Only at Zellers”.
Zellers, an iconic Canadian value for money retailer, closed its last store in 2013. A now all too common victim of fierce competition, dowdy products and online shopping.
It may have gone but it was forgotten for long. Its owner, historic retail giant The Hudson’s Bay Company, resurrected the Zellers name, its bright red logo, and “Zeddy” its mascot bear, in 2023.
Initially, Zeller’s appeared as small pop-ups within select Hudson’s Bay department stores. Now store-in-stores have taken over entire floors at 22 Hudsons’ Bay branches. Stand-alone Anko-stuffed Zellers’ are now a real possibility.
The reason for Anko’s Canadian expansion is brutal economics.
Like many department store chains, Hudson’s Bay – positioned somewhere between Myer and David Jones – has struggled.
It hopes Zellers will attract more cost conscious and younger shoppers while also taking up under-utilised space within massive stores.
In Vancouver, Zellers feels like an entirely separate store. Its gaudy graphics and pops of colour contrast with the understated elegance of Hudson’s Bay on the floors above.
Kmart, which has been keen to spruik Anko to other retailers, provided The Bay, as it’s colloquially known, with a fuss free way to flood Zellers’ shelves with own brand goods without the Canadian company having to go to the trouble of actually sourcing them itself.
“Anko has really become a winning brand for Kmart Australia,” Queensland University of Technology’s Professor Gary Mortimer told news.com.au.
“Once you can convince shoppers to trust your private label toaster, they are more like to buy your stationery, your T-shirts and bedding.”
Anko was introduced in 2019, consolidating under one name a whole bevy of other private label offerings.
It now accounts for an astounding 85 per cent of sales in Kmart.
Of Wesfarmers’ $2.6 billion worth of profits for the year to June 2024, almost $1 billion of that came from Kmart Group, which also includes Target.
“Kmart Group’s performance was a standout, delivering significant earnings growth supported by the market-leading value credentials of its Anko,” managing director Rob Scott said.
Kmart goes global
Neither Hudson’s Bay, which also owns up-market US retailer Sak’s Fifth Avenue, nor Kmart were keen to talk about Zellers, and if it was a success. Kmart told news.com.au it didn’t want to talk about other retailers.
But Kmart managing director Ian Bailey hasn’t been shy about the firm’s ambition to take Anko global.
“Our product has got to a level where we think it’s now globally competitive,” Mr Bailey told the Sydney Morning Heraldin 2023.
Canada he said, was merely “number one” on the list.
Risky move
The first stand-alone Anko store opened in the Philippines in November, and Kmart quietly trialled the concept in a handful of Anko branded stores in Seattle, south of Vancouver in the US, prior to the pandemic.
Prof Mortimer said Anko was a case study in how to do private label right. But its move overseas was still a leap.
“It shouldn’t be underestimated how difficult it is to create a global brand that is essentially a private label,” he said.
“A retailer manufacturing its own products and then selling them to another retail is a very unique business model.
“Expanding into Canada, in a partnership agreement, creates a global revenue stream for Kmart which enables it to continue to grow and innovate.
“It works internationally, but not domestically. You wouldn’t want Harris Scarfe selling Anko.”
Some Anko products are now available at Target, but Prof Mortimer said that was only feasible because the two share an owner. And even that has ruffled feathers with some Target shoppers more used to familiar brands.
‘Looks nothing like it’
In Canada too, opinions are mixed about the abundance of Anko in the rebirthed Zellers.
With the last Zellers having only closed a decade ago, Canadians can easily recollect the store. And it wasn’t full of Anko.
“Nothing here screams Zellers to me,” one commenter on social media said.
“It looks nothing like the old Zellers. And unfortunately that’s what I really want,” another said.
However, editor of Canada’s Retail Insider publication Craig Patterson said a move away from the ramshackle Zellers of old was no bad thing.
“Zellers could bring younger shoppers into Hudson’s Bay stores given the modern design of Anko products and the price point – so marketing to a younger demographic will be key,” he wrote.
“For me the Anko line is much better than the Zellers of a decade ago. It’s not the same store but the design is inspired by the original.”
Canadians frothing over Anko
Already, Anko is getting a following.
“I bought a pair of PJs for $10. I really like them! They’ve held up well and fit well too,” one person wrote on social media, sounding as excited as many a user of multiple Australian Kmart hack Facebook pages.
“I went today to check it out for myself inside The Bay and it was great,” another wrote.
Anko prices different in Canada
Canadians might not be so thrilled if they were aware of the price difference though.
A basket of Anko cat toys is $8 for Aussies, but the equivalent of more than $13 for Anko’s Canadian fans. A Marmo table lamp comes in at $20 for Australians but $35 for Canadians. A kids’ 8 piece wooden fruit cutting set will set you back $10 in Australia but $13 across the Pacific.
“If the prices vary, Canadians wouldn’t know,” Prof Jacobsen told news.com.au.
“We are quite used to elevated prices, even in comparison to the US.”
Anko expanding
Hudson’s Bay is betting big on Zellers. By this Christmas season, the firm said all 78 of its branches would either have a full sized Zeller’s within or a pop-up shop.
“We continue to see Canadians embrace Zellers, and are delighted by the experience of people discovering the amazing quality and style of the assortment we carry,” said Sophia Hwang-Judiesch, President of Hudson’s Bay, in a statement in September.
Prof Jacobsen said the combination of Australia’s Anko and the Zellers familiarity could win over shoppers.
“As a brand, Zellers brings back nostalgia for Canadians,” she continued.
“It’s a strategy that Canadians seem to be warming up to as long as the design and price point are there, which seems to be successful so far”.
Originally published as Secret Kmart 12,000km from Australia
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