Food will be the thing
Tasty plan at the heart of this revival, writes Zeenat Moorad second of a two-part series
Department stores are rare retail beasts. Unlike their forecourt or supermarket kinsmen who are largely fashioned for the prosaic, even grudging, activity of their in-and-out customers, department stores have a considered resolve to make you linger. They do this with visual and visceral displays, made-tomeasure suiting, flutes of crisp champagne and bespoke fragrance bars. Retail theatre, they call it.
Engaging customers through innovation and the unconventional can’t be replicated online, so department stores have essentially become spaces for inspiration and socialising and, in doing so, have found a way to remain relevant in a digital age.
In this blurring between retail and recreation, food plays a key role.
John Dixon, CEO of Australian department chain David Jones, says a thriving food business in a department store can have a “halo effect” on other categories.
“We started thinking about dwell time and the role of the department store in the future, especially with more and more people shopping online . . . [department stores] are really there to offer not only a house of brands but a layer of services, whether that’s beauty or otherwise as well as an overall leisure experience. So many women are looking to go shopping with their friends or mums and it becomes a day out,” he says.
Building a big food business is part of the revival of the 178year-old David Jones chain which, after years of underinvestment, was bought by JSElisted Woolworths two years ago in a R23.3bn deal.
One portfolio manager, who could not be named in line with company policy, says Woolworths had again proved to be clever operators. “Food brings in feet. This one-stop-shop or total retail type store with a clear cross-shop opportunity is what they had in mind when they bought the business . . . there’s only so much fancy perfume one can sell.”
The push into food leverages the strength of the David Jones brand. It already has a strong premium positioning, giving it a fighting chance to take some of Australia’s A$90bn grocery market.
Forget about flat whites, Tim Tams and Vegemite. In the past 10 years the Australian culinary scene has flourished, largely on the rise of reality cooking shows like MasterChef , the mindful or clean-eating movement and “Instagrammable” café culture.
Stuart Bennie, a retail consultant at Sydney-based Impact Retailing, says David Jones has always had a reputation for quality food “à la Harrods food hall”.
“The supermarket space is a different story — [it’s] highly competitive with Aldi having gained market share consistently until recently,” he says. “Woolworths (Australia) is in disarray. There is talk of Lidl entering the market. But at the top end David Jones has opportunities.”
‘‘ WE DON’T EXPECT TO MAKE ANY MONEY FOR THE FIRST COUPLE OF YEARS. WE ARE BUILDING A BUSINESS FOR THE FUTURE IAN MOIR