As it laid out its financial results last week,Wesfarmers said that Target had delivered strong numbers despite consumer spending starting to soften. However,most of the attention was on the success of Kmart,which managed to grow sales in every category and every state during the year.
Target,by comparison,was less consistent throughout 2023. “Second-half performance was variable across categories,with relatively stronger performance in apparel compared with challenging trading conditions in home and toys,” the company said.
It’s been three years since Wesfarmers undertook a majoroverhaul of the Target brand,involving the closure of some stores and the conversion of others to Kmart shopfronts as part of a major restructure.
And while the retail giant says the moves have put Target on a stronger footing,a piece of news last month ignited conversations in the retail sector about the road ahead for Target as discount shopping takes centre stage.
Wesfarmers confirmed a month ago it would merge the technology and systems of Kmart and Target,essentially building a discount department mega-store,at least as far as the back office is concerned. It’s a way for Wesfarmers to keep costs in check without passing too much of the burden onto its customers.
That news fuelled speculation about the long-term viability of the Target brand:if the back office is already under the one umbrella,how long before Kmart takes over from Target for good?