Discount Department Stores in Australia Industry Market Research Report Now Available from IBISWorld

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The revenue of the Discount Department Stores industry revenue surged during the global financial crisis as consumers revised their spending habits and traded down. Since then, price deflation has slowed revenue growth. For this reason, industry research firm IBISWorld has added a report on the Discount Department Stores industry in Australia to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

Increased price competition slows industry revenue growth

The Discount Department Stores industry in Australia has brought in a good haul. Over the five years through 2012-13, industry revenue is forecast to grow at a compound annual rate of 2.1% to reach $8.92 billion. According to IBISWorld industry analyst Ee Jen Lee, “weak economic conditions have fuelled demand for discounted products, contributing to a rise in revenue over this period”. Furthermore, the industry would not be what it is now if not for the significant overhaul of a major company's operations. The restructuring of Kmart's operations in 2008 not only lifted the company's revenue in 2008-09, but also significantly boosted overall industry revenue. Kmart's success has been emulated by other companies and has incentivised others to revise procurement practices.

As retailers in the industry mainly compete on price, retailers have actively sought to be a market leader in this aspect. The strong exchange rate has enabled companies to purchase inventory more cheaply. Retailers have been able to pass on these savings to customers. “Retailers are bypassing the intermediaries to generate more savings”, says Lee. “This strategy is part of the overall supply chain or procurement process and is likely to be the main engine for growth moving forward”.

Although the Discount Department Stores industry is peppered with success stories, there have been some noteworthy exits. Retail Adventures was forced into administration, while several other smaller players have struggled to keep their heads above water. Their struggles stem from their business models and poor management, as the fundamentals suggest that demand for low-cost products has been strong. High household savings rates suggest consumers will retain prudent spending habits.

The level of market share concentration in the industry is considered high. The top three players are Woolworths Limited, which operates in the industry through its Big W brand; Wesfarmers Limited, which owns the Australian arm of Kmart; and the Reject Shop Limited.

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

Follow IBISWorld on Twitter:!/ibisworldau

IBISWorld Industry Report Key Topics

Retailers in this industry sell various consumer goods at discounted prices. Unlike department stores that have separate cash registers in each department, discount department stores generally have central customer check-out locations.

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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