Kmart and Target join forces to create mega discount stores
Two of Australia’s favourite retail giants are about to get better in a huge merger creating a $10 billion discount giant.
Wesfarmers is set to fold Target into Kmart with hopes that it will improve sales, provide better value for customers, and allow both stores to share backend technology.
Ian Bailey the Managing Director of Kmart Group has said that there will be “no impact” to stores, and that the move was an "internal reorganisation".
"With customers now demanding value more than ever, this new operating model will unlock a new level of scale and productivity across both brands, so we can deliver even greater value to our customers in the future," he said in a statement.
"For store networks and 50,000 store team members – it's business as usual – as we continue to focus on providing the best value products to the thousands of customers in Australia and New Zealand who choose to shop at Kmart or Target every day."
The move comes as the cost of living crisis is forcing more and more Aussies to be mindful of their spending habits.
In a statement to the The Australian Financial Review, Bailey said that there would likely be “a handful of redundancies" but more jobs overall by next year.
He added that one of the benefits of tighter integration and better technology is the ease in which the prices of products can be reduced.
He said that the price drop on 1000 Kmart products this month was assisted by merchandise planning tools and a self-navigating inventory scanning robot.
"Kmart and Target are both strong businesses. I don't see us doing this from a position of weakness. It's quite the opposite,” he told the publication.
“I'd say we're strong, but I think there's an opportunity to really capitalise on this time and find ways to continue to deliver better value for customers."
"What we found was that running two businesses it was very, very difficult to get the tech into Target, and to get those benefits. This is really why we decided to push the two businesses into one."
Images: Getty