Thursday, July 3, 2014

The Cairns Central Cannibal?

Cairns Central shopping centre was initially a development between the old Coles Myer and Suncorp. This is why it was stacked with Myer, Coles, BI-LO, and Target as the anchor tenants. The potential for cannibalisation between the various divisions had always been an issue. Myer was subsequently split off before Wesfarmers took over the remainder which also includes K-Mart.

The BI-LO supermarket stores have also been strategically problematic and the Cairns Central store today transforms and opens as a K-Mart directly above the Target store downstairs. Which is interesting because just yesterday Wesfarmers announced a big write-down on the valuation of Target: Wesfarmers not giving up on family
Goyder, however, sticks to his theory that Kmart and Target can co-exist under the Wesfarmers umbrella and both make a good return. The fact that most of the profit decrease from Target over the past three years is matched by Kmart's gains suggests otherwise. However, this is not just about straight cannibalisation as others in the discount department store space have experienced mixed fortunes.
So it will be interesting to observe how this works out at Central with the two now trading in such close proximity.

1 comment:

  1. Sam's Warehouse and Crazy Clarke's went into receivership today...