Explained: Why would Kmart expand in this tough retail environment?

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Now seems to be a tough time to be opening New Zealand’s biggest Kmart, given that retail spending is down.

But the Melbourne-based boss of Kmart pointed to shoppers being even keener on
value when things get tough economically.

John Gualtieri, Australia and New Zealand chief executive, indicated this difficult retail climate was one of the reasons Kmart wanted to build a colossal new store on this side of the Tasman.
It was also part of a long-held expansion plan to build this country’s largest Kmart, he said.
“As New Zealanders continue to face rising household costs, providing access to great value products at the lowest prices has never been more important to our customers,” he said.
Stats NZ said last month spending continued to fall: seasonally adjusted retail sales dropped 1.2% in the June quarter compared with the March quarter – the eighth consecutive quarter to drop, reflecting cost-of-living pressures.
Kmart, owned by ASX-listed Wesfarmers, advertises itself as “affordable” with its homeware, furniture, electronics, toys and clothing it sells.
Financial accounts for Kmart NZ Holdings show it had total revenue of $924 million in the year to June 2023, up from $719m in 2022. Its net profit after tax was $69.7m up from $48.8m. The NZ arm paid a dividend of $66m, up from $50m. Its 2024 New Zealand accounts have yet to be filed with the Companies Office.
Gualtieri said the retailer had been eyeing opportunities to build this giant new store here for the past 10 years.
“After more than a decade of searching, we are delighted to have found the perfect home for our most ambitious store launch yet in New Zealand. Westgate has been our biggest network gap in New Zealand and thanks to our partnership with New Zealand Retail Property Group, we can now deliver our largest and, we hope, best store in New Zealand,” he said, referring to the landowner.
A colossal new shop spanning more than a half-hectare is to be built at Westgate, with 600 car parks in an area already criticised for traffic flows.
The largest Kmart in Australasia is a 6800sq m store in the centre of Melbourne.
The site on Maki Pl is to be off Maki St, opposite the lifestyle centre and a little down from the American-owned Costco Wholesale.
Staff at Kmart’s head office in Melbourne gave more details of what is planned at the 6700sq m shop.
“The new Westgate Kmart will feature the largest sales floor constructed by Kmart in New Zealand, ensuring a superior shopping experience with an extensive range of products under one roof,” the statement issued today said.
“The centre is designed for ultimate convenience, featuring more than 600 parking spaces as well as a dedicated all-weather direct-to-boot pick-up facility. As the third 24-hour Kmart store in New Zealand, this location will provide customers with the flexibility to shop whenever they choose day or night,” that said.
Kmarts in Manukau and at Sylvia Park are already open 24/7.
The new store is due to open in 2026 and will employ about 240 staff.
New Zealand’s first Kmart opened in Henderson in 1988.
Today 27 stores are open, “delivering on its promise of the lowest prices on everyday items. Serving millions of customers every year”, the business said.
Last September, Kmart opened a new distribution centre at the Ruakura Superhub.
That 40,000sq m centre has warehousing, distribution, storage, a container yard and offices and is supplying stores nationally with the Christchurch distribution centre.
Gualtieri said last September that the larger, purpose-built base would allow the company to work more efficiently and has “lots of opportunity” for years to come.
The Superhub was developed by Tainui Group Holdings whose chair, Hinerangi Raumati-Tu’ua, described it as a “real boost” to the Hamilton and Waikato economies.
Kmart has 27 New Zealand stores at Albany, Ashburton, Auckland, Bayfair, Bethlehem, Blenheim, Botany, Dunedin, Hamilton, Hastings, Henderson, Invercargill, Manukau, Napier, Palmerston North, Papanui, Papatoetoe, Petone, Porirua, Queenstown, Riccarton, Richmond, Rotorua, St Lukes, Sylvia Park, Te Rapa, Whakatane and Whangarei.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.

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