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Why Kmart is opening up a furniture showroom and taking on IKEA

Retail giant Kmart is setting up its first physical showroom for furniture and homewares as it seeks a bigger slice of a $35 billion market, with Rob Scott, the chief executive of its parent company Wesfarmers, saying bricks-and-mortar outlets remain critical despite growth in online commerce.

Wesfarmers, which also owns Officeworks and Bunnings, is navigating a changing retail environment as more shoppers rely on artificial intelligence and purchase online.

Speaking to this masthead during Wesfarmers’ strategy day in Sydney on Wednesday, Scott says he remains optimistic about continuing to grow Kmart’s bricks-and-mortar stores. The company’s new “K Home” concept, which is opening in Melbourne’s Box Hill South, is but the latest addition.

Kmart returning checkouts to exits in Australia

A Kmart store pictured in Hamilton in 2021. File photo. (Source: Getty)

Two dozen Kmarts in Australia will be refurbished with a new format that moves the cash registers back to the store entrances, and the group is also trialling a new concept store for home goods.

Kmart Group managing director Aleksandra Spaseska told analysts on Wednesday that 16 of the roughly 300 Kmarts in Australia had already been converted to the "Plan C+" format, which features entry and exit gates and relocated cash registers.

"It is delivering improved space allocation, better visual merchandising, and an enhanced beauty experience," Spaseska said.

The format is also driving higher sales through increased cross-shop between departments, with shoppers buying more items per basket, she said.

Kmart reverses major checkout change after more than a decade

Kmart is ditching its controversial centre of store checkouts for dozens of stores and moving them back to the traditional front entrance checkouts. The budget retailer first began moving its cash registers to the middle of stores more than a decade ago, sparking waves of complaints from shoppers.

Now, Kmart has confirmed it is overhauling more of its stores to return cash registers to the front. Kmart Group managing director Aleksandra Spaseska told analysts that 16 of the roughly 300 Kmart stores across the country had already been converted to the new 'Plan C+' format, which includes entry and exit gates and the relocated checkouts.

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