‘We serve different needs’: Urban Rampage defends itself against unflattering Kmart price comparison

A retailer that bills itself as the “the lifeline retail network for remote Indigenous communities in rural Australia” has derided a financial advocate’s comparison of its goods to similar, cheaper Kmart products.

Price comparisons between Urban Rampage, which has four outlets in the Northern Territory, and Kmart. Picture: Supplied

A northern Australian financial adviser says he is “deeply disturbed” by the business model of a clothing retailer with a significant Aboriginal clientele, saying that similar items can be purchased at Kmart for a fraction of the cost.

Broome-based Alan Gray, an accredited financial counsellor and managing director of Bush Money Mob, said he was motivated to speak out amid claims by Urban Rampage, which has 10 stores nationwide, including outlets at Alice Springs, Katherine, Tennant Creek and Nhulunbuy, that it empowers Aboriginal customers.

In late February, corporate regulator ASIC suspended Urban Rampage’s ability to sell goods on Credit via Centrepay, in which Centrelink customers have their bills and payments deducted prior to receiving their benefit.

At the time, ASIC said it held concerns that Urban Rampage was targeting vulnerable, financially illiterate customers without appropriate safeguards to ensure they could actually afford the goods.

Urban Rampage Katherine. Picture: Google Street View

The regulator’s decision enraged Urban Rampage’s parent company Coral Coast Distributors (Cairns) Pty Ltd, which said it provides vital goods in under-serviced towns, calling itself “the lifeline retail network for remote Indigenous communities in rural Australia”.

The company said more than 80 customers had lodged complaints with Urban Rampage about the ASIC suspension, while more than 700 signed in-store petitions calling for Centrepay’s return.

However, Mr Gray, who is not the first advocate to speak out against the retailer, claimed Urban Rampage is in the business of selling “low-grade products [at] grossly inflated prices”.

Mr Gray said that on March 20, he photographed items for sale at Urban Rampage Broome, then compared the prices to similar goods available at his local Kmart.

Price comparisons between Urban Rampage, which has four outlets in the Northern Territory, and Kmart. Picture: Supplied

He believed the comparison to be unflattering.

A business shirt, a hoodie jumper, and a mink blanket go for $69.95, $74 and $89.95 respectively at Urban Rampage, according to his photographs.

However, according to Mr Gray, similar items can be obtained at Kmart for $15, $25 and $19 respectively – albeit that only half of the towns in which Urban Rampage has a presence also have a Kmart.

“Why would anyone pay $74 for a hoodie when they could buy a better quality hoodie in the same town for $25?” Mr Gray asked.

“The answer, of course, is that people don’t have the $74, but they can get the hoodie today on Centrepay with no cash.

“When Urban Rampage say they’re standing up for the human rights of their remote customers, it’s breathtaking.”

Price comparisons between Urban Rampage, which has four outlets in the Northern Territory, and Kmart. Picture: Supplied

He said he was “deeply disturbed” by the company’s business model, having encountered “many dozens” of customers who had signed up to Centrepay plans via Urban Rampage.

“I remain just as alarmed about their business model and operating methods today as when I first encountered them many years ago,” he said.

Urban Rampage’s parent company derided the comparison as unfair on the basis that the goods were not like-for-like and involved different suppliers and supply chains.

“The pricing comparison being made is not between identical products sourced from the same supplier,” a spokesman said.

“Urban Rampage does not stock or sell Kmart items, and thus, the alleged mark-up claims cannot be substantiated.

“We stand by the fact that the products we offer, although they might appear similar in a broader category sense, are distinct in brand, source, and attributes.

Bush Money Mob managing director Alan Gray, an accredited financial advisor. Picture: LinkedIn

“Consequently, they serve different segments and needs within the market, which is reflected in their pricing.

“Urban Rampage sources products from a variety of suppliers, each with unique costs, which in turn, affect our pricing strategy.

“The items in question, while they may appear similar, are distinct in brand, quality, and supply chain circumstances, which accounts for the differences in pricing compared to other retailers like Kmart.”

Urban Rampage’s parent company continues to fight against its suspension from using Centrepay.

It has vowed to take the matter to the Administrative Appeals Tribunal unless ASIC, continues to mull whether it converts the suspension to a permanent ban or reverses it, can provide a concrete time for when the matter will be resolved.

ASIC is understood to have given a timetable of several weeks, backdated to the last hearing date on March 15.