Kmart pushes into provinces
Kmart is ramping up the pressure on rival The Warehouse in the regions, a retail expert says.
While Kmart prepares to open new stores in Invercargill, Blenheim and Queenstown, The Warehouse is laying off 180 staff members, mostly from its provincial centres.
The job losses are a result of The Warehouse’s move to simplify its instore management structure to more closely resemble that of Kmart.
Kmart said on Monday it would offer jobs to some of The Warehouse workers being laid off.
The workers will need to go through the normal recruitment process, but Kmart will prioritise 60 positions for them.
Retail development expert Paul Keane, of property consultancy firm RCG, said the Australian-owned big-box homewares retailer would focus on areas with available workers and population growth, leaving small country towns to shop at The Warehouse.
But even The Warehouse seemed to be ‘‘retreating’’ from that niche in response to the higher costs associated with those markets, he said.
First Union organiser Kate Davis said The Warehouse’s workers were ‘‘absolutely terrified’’ of losing their jobs, especially those on visas who face splitting up their families if they lost their job and had to leave the country.
Retail expert John Polkinghorne said smaller towns such as Cambridge and Te Awamutu would be ‘‘low priority’’ for Kmart.
He said Whakatane had a store and similar-sized town could follow. ‘‘Somewhere like Taupo isn’t out of the question.’’
But even shoppers in some of New Zealand’s biggest cities still have to drive some distance to the nearest Kmart. For example, the nearest Kmart to Wellington is in Lower Hutt. Keane said this was because rents in central Wellington were too expensive for large budget retailers.
Kmart initially expanded quickly when it arrived in New Zealand in 1988, but its aggressive expansion stalled soon after as it struck trouble in Australia, Keane said.
‘‘They’ve changed their image and their marketing and in the last five years we’ve seen them start to expand again.’’
This change in image led to a ‘‘more upmarket feel’’ that has made it competitive with The Warehouse, Keane said.
The Warehouse has 94 stores nationwide, while Kmart has 19 (soon to be 22). The Warehouse still has Gisborne, Timaru, Ashburton, Taupo, Matamata, Gore, Oamaru, Greymouth, Wairarapa, New Plymouth, Kaitaia and Morrinsville to itself.
Keane said Kmart property managers stuck to strict requirements when picking a new site, which included population growth, store size, rent, and car parking.
The company’s stores tended to be about 4000 square metres.
Kmart’s Australian parent company, Wesfarmers, said in its annual report that it expected to open 10 new stores in the year to June 2019 in New Zealand and Australia.
Kmart operates 220 stores throughout Australia and New Zealand and employs about 30,000 people.
‘‘They’ve changed their image and their marketing and in the last five years we’ve seen them start to expand again.’’ John Polkinghorne, retail expert