Kmart takes over Target in Australia: What it means for shoppers
Kmart’s takeover of Target could be a big win for shoppers, with the move predicted to do little to ease the fierce competition for sales in the discount department store battle.
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The shock closure and conversion of over 160 Target stores around Australia is good news for some customers but bad news for others.
But that could all depend on where you live.
Today, parent company Wesfarmers announced up to 167 Target stores could disappear over the next year. That accounts for half of the Target discount department store network.
Under the plan, as many as 75 stores will closed and 92 will be transformed into Kmart outlets.
Retail experts believe the move will be a good one as far as most shoppers are concerned.
There is growing speculation it could spark a price war between Kmart and rival discount shopping outlet Big W.
However regional Australia could be hit hard as 50 small format Target Country stores will close. That could mean some areas are left without a discount department store at all.
“It’s been a tough decision and there are projected job losses but ultimately the customer wins out,” retail expert Gary Mortimer, Associate Professor at Queensland University of Technology, told News Corp.
“In capital cities you won’t see any significant change in relation to price and the upside of this is that suburbs that don’t have a Kmart will have one soon. However it’s a challenge in regional areas and rural towns. There will be 50 stores closed in regional towns and that may well mean they lose a lot of choice.”
CEO of Retail Doctor Group Brian Walker agreed.
“In the announcent Wesfarmers made reference to closures in regional Australia and that is the piece that is concerning,” he told News Corp.
“It would be good to ensure people in country Australia aren’t disadvantaged. You would hope they still have a range of discount department stores in regional Australia whether it is Target or Kmart. There are a lot of customers loyal to Target in the country.”
Agriculture Minister David Littleproud has called on Australians to boycott Wesfarmers’ stores — be it Kmart or Target after the shock announcement.
“It just goes to show they don’t give a rat’s about us,” he said.
Australians should vote with their wallets and not go near them ... I’ll be saying to everyone don’t shop at these stores.
“Go and shop at those outlets that are prepared to support not just metropolitan Australians but regional Australians.”
“They make a lot of money. They make billions out of Australians.
“If they want to turn their back on the most vulnerable, it just goes to show that corporate Australia has lost its way morally.”
CHEAP, CHEERFUL AND SAVVY SHOPPERS
The range and availability of goods in metropolitan areas is also likely to be unaffected.
Mr Walker said Kmart’s growth in scale and market share and a streamlining of back end services such as payroll, IT and executive salaries would also be benefit Wesfarmers and shoppers.
“I don’t think Kmart will be more expensive, it may even be more to the advantage of consumers,” he said.
“They are a high volume, low margin business so the more things they package under the one brand the better. Customers are well educated these days and discount stores are a highly competitive model.”
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Mr Walker said Target’s bricks and mortar footprint could continue to shrink until it becomes solely an online retailer.
However Prof Mortimer said Kmart would continue to grow in size and strength.
“I expect to see Kmart’s fleet of stores increase in size considerably with Wesfarmers able to remove and reduce duplication of the costs of doing business,” he said.
“They can reduce their Target footprint, sharpen their Kmart discount focus and put more time, money and energy into making Kmart more successful.
“Customers looking for cheap homewares, cheap T-shirts and the rest will still be happy shopping at Kmart.
“Kmart is certainly cheap and cheerful but shoppers now realise that if I’m shopping at Kmart or Aldi I’m not cheap I’m savvy and that’s why they love putting up their hacks online to say ‘look at all the money I’ve saved’”.
Originally published as Kmart takes over Target in Australia: What it means for shoppers