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Why Is Big W CE Flying & Target Struggling

Serious questions are being asked as to why Target is struggling in the consumer electronics and branded small appliance market, when archrival Big W has grown their CE business during the past three years.

The battle between the two discount store giants have been ongoing for years with many now questioning the direction Target is taking after the retailers appears to have cut back dramatically on the sale of products such as TV’s and small appliances.

Wesfarmers’ decision to close or rebrand up to 167 of its 284 Target and Target Country stores should not come as too much of a surprise to the industry.

The Kmart Group (Kmart, Target and Catch) witnessed a 7.2% increase in revenue.

In 2020 Wesfarmers the owner of Kmart and Target as well as Catch, said that Catch and Kmart were focused on future growth investments however management do not expect Target to be profitable in FY21.

Target Australia has dwindled its store network, which is expected to reduce the impact on Kmart Group while archrival Big W has returned to profits and is growing.

Last year Wesfarmers continued its conversion of many Target sites into Kmart or smaller K Hub stores with serious questions being asked about the buying decisions at Target with several observers in the industry blaming ranging and buying decisions as the reason for the poor performance at Target.

Scott White the current Business Manager, General Merchandise & Food at Target Australia was at archrival Big W, where he was Head of Buying – Technology & Entertainment, Health & Beauty.

During his period at Big W CE and Entertainment struggled to grow but as soon as Big W bought in new buyers who ranged branded products the category took off.

Today Big W is selling Apple, Fitbit, Sony, JBL, branded products at prices that are often cheaper than the likes of Harvey Norman and Bing Lee.

Brands have told ChannelNews that the strategy adopted by Taren Singh the VE buyer at Big W is radically different from that implemented by Scott White while he was at Big W and now at Target.

A visit to the Target web site under TV’s reveals no TV’s but you do get an offer on Duracell batteries while a visit to the Big W TV category reveals a choice of TV brands from Sony to Polaroid to JVC to Eko.

In the audio category Target is selling branded sound products from Ultimate Ears and JBL a move than was initiated after seeing the success of branded products at Big W.

In August 2020 as Target were slumping Big W’s sales accelerated in Q4 FY20 under COVID-19 lockdowns, increasing by 31.8% year-on-year (y-o-y).

Over the whole financial year, the retailer’s total sales rose by 10.5% to hit $4.1 billion.

We have attempted to contact Scott White to ascertain his buying strategy for Target CE products we were asked to contact Corporate PR.

 

 

 

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