Mike Lee: Auckland University marketing professor on Kmart New Zealand's revenue nearing $1 billion

Kmart's New Zealand operation is approaching the $1 billion turnover mark, as it plans to open its largest store in the country yet. 

BusinessDesk reports annual earnings lodged with the Companies Office show Kmart NZ Holdings declared just shy of $1 billion total revenue in the year to June 30. 

Auckland University marketing professor says Kmart has managed to create quality products and boost its fashion output to avoid the stigma that comes with big-box retailers.

"They've reduced the amount of stuff that they had and they're only focused on really good, quality products at that affordable price - so through doing that and getting their fashion and style up, they've managed to avoid the stigma."

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Most retailers are struggling, but Kmart is certainly not. Kmart's
revenue New Zealand grew to almost one billion dollars for
the financial Yeah. Actually that's the region's revenue. The company
made more than one hundred million dollars in profit here
in New Zealand. That's up fifty two percent year on year.
Auckland University marketing professor Mike Lee has with been our
Hey Mike.

Speaker 2 (00:20):
Hey, thanks for having me, Mike.

Speaker 1 (00:22):
For them to go up fifty two percent year on
year is remarkable given how hard the warehouse is doing it,
isn't it.

Speaker 2 (00:29):
Yeah. I mean, if you look at some of the
grass they're available at, the warehouse is plateaued for a
while now, and the cccmart kind of encroaching on their
market share. You're on here, just climbing that steep upwards
sort of trajectory.

Speaker 1 (00:43):
What are they doing, right, do you reckon? I mean,
obviously they've got a range of stuff that's cool, and
they've also got at really good prices. But is there
something else going on here?

Speaker 2 (00:52):
Yeah? I think they've made a strategic decision a piccaut
or soga to really instead of trying to be everything
to everyone as to be just a few things, a
few really good things to a few people. And that's
just been a model that's really really what they've been leveraging.
They reduced the amount of stuff that they had and
only focused on really good quality products at that affordable price.

(01:14):
And so through doing that and sort of getting their
fashion and style up a bit, they've managed to sort
of avoid the stigma that most big box retail bargain
retailers have and so now you've got a generation of
people that are seeing things on TikTok and trends and
other things that are able to go to came out
and not feel embarrassed by it. There's not that stigma,
and I think that's where a lot of the growth

(01:35):
is coming from as well.

Speaker 1 (01:37):
So who is it that they're actually targeting. Is it
young mums?

Speaker 2 (01:41):
I think it's definitely a younger profile, maybe slightly trendier
fashionable people, but also a lot of you know gen
Z's and people that are following influencers. You know, seeing
people sort of lifestyle hacks to get a certain look
for a certain price, but then also get products that
aren't maybe perceived as as tinny as some of the

(02:03):
other products you might get at the cheaper places.

Speaker 1 (02:06):
Do you buy anything from Kman I have in the past.

Speaker 2 (02:10):
Yeah, for sure, and it's it's been pretty good. And
obviously the store environment when you go in is a
little bit more, I guess, feels a bit more upmarket,
not quite the sort of same bargain sort of bin
field that you get. Yeah, and the real test will be,
you know, when they open that megastore opposite Costcos and
Worth Pokland and how that fares. Yeah.

Speaker 1 (02:31):
Interesting. Hey, Mike, thanks very much. I really appreciate your
running us through your thoughts there. That's Mike Lee, Auckland
University marketing professor. For more from Hither Duplessy Allen Drive,
listen live to news talks.

Speaker 2 (02:41):
It'd be from four pm weekdays, or follow the podcast
on iHeartRadio.