Discount Department Stores Industry Market Research Report Now Updated by IBISWorld

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The Discount Department Stores industry is set to return to growth in the next five years as operators attempt to take market share from mid-tier stores. For this reason, industry research firm IBISWorld has updated its report on the Discount Department Stores industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

The industry's major companies will adopt strategies involving brand and product repositioning and supply chain restructuring.

While the Discount Department Stores industry in Australia has by no means achieved robust growth over the past five years, it has not fared as poorly as its mid-tier and up-market counterparts. Plummeting consumer sentiment, instability in financial markets and widespread economic uncertainty following the global financial crisis prompted many households to scale back expenditure, increase savings and pay down debt. According to IBISWorld industry analyst Lauren Magner, “These weak economic conditions supported demand for discounted products as value-conscious consumers opted for the cheaper alternatives offered by industry operators.” However, the industry was not immune to the effects of weak consumer confidence and the subdued spending that plagued the overall retail sector, and as a result, industry revenue is estimated to decline by an annualised 0.7% over the five years through 2013-14, to total $9.5 billion.

Price forms the major basis of competition between industry operators, and discount department stores have actively sought to be a market leader in this aspect. Improved global sourcing methods and a strong Australian dollar have enabled retailers to purchase inventory at a lower cost. By sourcing products directly from manufacturers in low-cost countries such as China, industry operators have been able to bypass the wholesale function, saving on intermediary costs. “Companies have passed on some cost savings to consumers in the form of lower prices, and this was the main factor driving a return to growth in 2012-13,” says Magner. Industry revenue is expected to rise by 2.4% in 2013-14, as consumers flock to discount department stores in search of the lowest prices. The Discount Department Stores industry is characterised by a high level of market share concentration, dominated by Woolworths Ltd and Wesfarmers Limited.

Over the next five years, the industry's major companies will continue to adopt strategies involving brand and product repositioning and supply chain restructuring, in an attempt to steal market share from mid-tier and up-market department stores such as Target, Myer and David Jones. Business models will focus on offering consumers the lowest prices possible on a diverse range of products, targeting consumers with prudent spending habits. However, fierce price competition from online stores, specialised retailers and other department stores will constrain growth.

For more information, visit IBISWorld’s Discount Department Stores industry in Australia report page.

Follow IBISWorld on Twitter:!/ibisworldau

IBISWorld industry Report Key Topics

Retailers in this industry sell various consumer goods at discounted prices. Unlike up-market department stores that have separate cash registers in each department, discount department stores generally have central customer check-out locations. Discount department stores typically purchase products from wholesalers and manufacturers and then sell these on to consumers.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit or call (03) 9655 3886.

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Gavin Smith
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