Wesfarmers revealed a raft of initiatives and a long-term strategy to lift Kmart and Target sales at an investor briefing this morning.
The Investor Briefing Presentation, held in Sydney, saw various management heads from Wesfarmer's divisions gather to review company performance and present business strategies for the coming financial year, with its discount department stores Target and Kmart identified as two of the businesses set for change.
Future plans for Target, which reported a stagnant total sales figure for the third quarter, include upgrading its store network, with 11 new Target stores and 18 Target Country stores planned for launch during financial year 2012. Sixty-six store refurbishments, including 37 Target Country stores, are also marked for completion by the end of the financial year 2011.
Target will also trial a new store format titled Urban by Target, designed to reach customers in inner city areas. Though a launch date was not specified, Chapel Street in Melbourne has been locked in as the first location for the debut store.
Urban by Target will "deliver tailored ranges to match each store's demographic", and new floorings, fittings and fixtures are set to differentiate the store's concept from that of Target suburban stores.
The company outlined it is also working towards improving its operational efficiency via increased IT investment, two new multi-shore offsites and increased capacity in South East Asian ports.
Target has also invested in a “mock shop” to train staff and improve in-store execution, as well as a Design & Innnovation Studio opened to “host regular Concept & Trend Forums”.
Sister company Kmart, by comparison, revealed less detail about strategies for the future, but said that there were “more stores in the pipeline” as well as plans to improve store layouts and shopping environments throughout its outlets.
Kmart also hinted at a tough retail period and said that “forecasting the right volumes has been challenging” but it would “continue to pressure test the ranges” and is working on “improving the flow of high volumes of product to stores” to increase on-shelf availability and sales.
The outlook for the discount department store also identified network expansion, refining product offer in stores, and a reducing store remuneration through improved efficiency as current objectives.
As reported in Ragtrader.com.au, Wefarmers recently reported lacklustre retail sales figures for its discount department stores Target and Kmart, for the 12-week period from January, 2011 to March, 2011.
According to a statement on the Australian Securities Exchange today, while total sales for Target during the third quarter were in line with the corresponding period at $724 million, they were down 2.4 per cent to $2.9 billion for the financial year to date (June 27, 2010 to March 26, 2011).
Sister company Kmart also reported a 2.5 per cent drop in retail sales during third quarter period to $803 million and comparable store sales declined by 3.3 per cent. Sales for the financial year to date were up marginally by 0.7 per cent to $3.1 billion.