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What does the future hold for our major department stores like Kmart, Big W and David Jones? Rumblings in the market show that the future may not be so bright for our favourite mega-stores.

Australia’s retail world is still reeling after the recent devaluing David Jones’ empire by a massive $437-million. The owners, Woolworths in South Africa (a completely different company to our local Woolworths), admitted that the business is just not worth as much as it originally estimated.

Taking A Hit

When so many of us are all out there looking for a bargain, it’s not that surprising that traditional department stores like DJ’s and Myer may be struggling. But experts are also saying that the discount stores, like Kmart, are also taking a commercial beating.

“The retail sector in Australia is currently in recession,” said a spokesman for Woolworths South Africa.

This has sent a shiver of concern across our entire retail sector. Myer shareholders reacted by selling stock, which then caused the Myer share price to plummet.

Sales Are Just Not Growing

Economist, Jason Murphy, writing for news.com.au explains:

“Australia-wide, department stores are selling about the same volume of goods as they did 10 years ago.”

He said that in 2009, sales growth just plateaued and has never been kick-started back into action ever since.

This could very well be attributed to the rise of online shopping or the trend towards specialist stores such as JB Hi-fi and Bunnings which offer products only with a specific category, rather than the wide-ranging variety on sale in the department store.

The Future Of Department Stores Is Unknown

However, Murphy contends that this doesn’t necessarily mean an end to department stores. (Although he does note that US department store behemoth, Barneys, is considering declaring bankruptcy).

“Department stores are still selling $1.5 billion worth of stuff each month. It’s just that seeing as how the country is much bigger and richer, that represents a smaller and smaller amount sold to each of us.”

It’s (Hopefully) NOT The End Of Kmart As We Know It

Kmart is certainly not immune to these retail rumblings.

Kmart’s recent trading update showed that comparable sales fell 0.2 per cent. This may not seem a huge number but the results are still showing a downturn as opposed to an increase in sales – which is a worrying sign for any store.

It looks like we won’t need to start planning Kmart’s funeral quite yet. But we may need to come to terms with the reality that Kmart (and other department stores) may not be around forever.

Would you be sad if Kmart closed down? Tell us in the comments below.

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  • The only large store we have here is Big W and I cant see that closing.

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  • I stopped shopping at Kmart a long time ago when their items became too cheap. They tried to get the balance right to entice more sales but sadly went to far. A lot of their items are just not good quality.

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  • I would prefer not to see jobs lost.

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  • I would be extremely sad if Kmart closed. I pretty much only shop there. The Kmart in my town is always so busy

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  • Whenever I go to a Kmart store they are always packed and have lines at the checkouts. I can understand David Jones and Myers having trouble as their prices are too high for the lower income person but Kmart have very reasonable priced and good quality products. I would be sad to see them go I must say

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  • They sell things so cheap that they can’t be making much profit?

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  • hope they don’t close Kmart

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  • I am really not surprised that Myer and David Jones aren’t doing well. They have massive competition with online stores that constantly have sales and their prices are mostly better. So many people prefer to shop from home I think nowadays too, much easier as well.

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  • David Jones are trying to shake things up with their rewards program, which is great, but I wish they would fix their online site. It can be very annoying trying to find out whether a particular store has an item in stock for click and collect.

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  • It is not surprising that Myers & DJ’s are in trouble because they have not kept up with online marketing & sales, they were great for good quality items & clothing but now my kdis are grown up I rarely shop with them. The closest stores I have nearby are hard to get to because of parking & access plus they are selective about what they post so I no longer shop with them. As for KMart & BigW their products are cheap & don’t last like they used to, they were my go to shop for clothing & household items years ago but not worth it now. I hate KMart’s store layout & after a few bad experiences with disabled access to their checkouts so I refuse to go there now, at least BigW has not made it difficult yet. The large shopping centres such as Stockland’s are too difficult for access for the elderly & disabled so I do a great deal of my shopping online, the only items hard to shop for online are shoes so I choose smaller shopping centres for those.
    I won’t miss KMart if they disappear because I can get the same stuff from EBay or other online shopping & it is delivered to my home. The only sad side of stores closing is the jobs they provide for our teenagers because it is a perfect training environment to train them in customer service.

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  • I’d be devastated if KMart closed. It’s my staple go-to for most things. I never shop at DJs and very rarely at Myer as there’s not one near me. So KMart and Big W are it for me in my shopping centre.

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  • I know a lot of people would be shattered if Kmart closed. Including me.

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  • I will be so unhappy if David Jones, K-Mart and Target close down as I hate online shopping especially for clothing. When I go to buy clothing I have to take three or four sizes of the same article so that one will fit me – I can’t do that online. But I don’t buy as much as I used to because my children have now grown, so I don’t need to buy new gear for them all the time and on a lesser income I make my clothes last longer. Guess many are in the same boat of not having as much disposable income as we once did.

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  • I would not be surprised if David Jones is struggling. They are very expensive and have been since the 1950s or earlier according to relatives and friends. Myer is / was not quite as expensive. Ar one stage they had a bargain basement where they sold surplus stock or out of season stock. My Mum got some fantastic bargains and they were good quality too. She bought me a Parka which I wore every weekend on at least one day from Autumn to Spring for a few years until I put on too much weight to it, then it was past on to a younger relative.

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  • I don’t like shopping online for things, I would rather go into the store and see and touch things. I really hope this isn’t the end of Kmart !


    • Yes me too.



      • I agree – I like to see and touch and try on clothes and see products in store.

    Reply

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