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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  • It would be sad if these iconic stores were to go.

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  • The shopping market has changed so much, it makes me sad as bricks and mortar stores is where the fun of shopping is for me

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  • New age. New chapter online shopping. Kmart is so cheap though and lovely things be a shame.

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  • it would be sad as these are such historic stores

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  • I’m on the fence with this one. I’d be sad if Kmart ended up shutting shop but I’d survive. I hardly go to Kmart anymore so can understand the drop in sales. Like the article says – online shopping and specialty shops have picked up. It also comes down to the vibe of the store and the quality of some of the products. Don’t get me wrong I’ll shop at Kmart if I need to for clothing and homeware but shoe wise I’ve always chosen a specialty foot store especially for my kids – I believe they should have comfort and properly fit shoes that last.

    Reply

  • Store layouts and stock have changed over the years and I do not find them as appealing.
    Stores used to feel more welcoming and fun and the cafes in store were a bonus and appealing too.
    Maybe if stores were more family friendly they would be more appealing for shopping.
    I am not a fan of the central checkouts – prefer the checkouts when you exit the store.

    Reply

  • Yes I would be sad when Kmart would close down, we love Kmart.

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  • When Kmart put the cashier in the middle of the store and then refused to actually get some-one to man them all the while pushing you to self serve (doing their job with NO staff discount)…..No service NO customer….basic but really bureaucrats looking for their bonuses instead of looking for answers….I avoid Kmart and Target like the plague for their stupidity……self inflicted NO sympathy

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  • Kmart will still be better than the big names for their prices

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  • They all sell the same thing, more or less. So I don’t think it would make a difference to consumers.

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  • Nooo the number of people who would be so upset if Kmart went. I do agree with most no one can afford things. They go without then buy things

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  • These stores are all online so it is not because online shopping is causing the downturn, it is because wages are stagnant. People are struggling to pay mortgages, utilities and telcos, less is going on everyday items and clothing. If I shop online I shop from Australian stores which mostly have bricks and mortar stores too.

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  • myer and david jones are way too over priced, I can’t even afford to step in the door


    • I agree, I stay away from these stores.

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  • I enjoy shopping at Kmart, would be disappointing if they close them

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  • I love Kmart! It would be so sad to see it close! :( Dj’ I can live without as it’s March is much to overpriced for my taste.

    Reply

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