Kmart is beating up Big W and giving Woolies a major headache

Its ability to copy designer goods and sell them at discounted prices has also been a hit with younger TikTok-crazy consumers.

Meanwhile, Big W isn’t making enough money and its latest losses are significant enough to take the gloss off Woolworths’s overall profit. If Big W’s issues were simple or a one-off they could be forgiven. But over the last 15 years, the discount department store’s earnings have been a rollercoaster ride – sufficient to induce queasiness for Woolworths shareholders.

And once again Woolworths is talking about “transformation” of Big W.

Back in 2018, Woolworths reported that after a loss of $110 million over a couple of ugly years, Big W had turned a corner. “Prices are significantly more competitive than this time last year, the majority of stores have been refreshed, and the range is beginning to resonate with customers. Comparable sales increased by 0.9 per cent in FY18, the first increase since FY09,” Woolworths said at the time.

But here we are again, with red across the board and Woolworths back talking about the need to transform Big W, which has spent far too long sheltered inside the larger business.

Bardwell has publicly recognised that Big W’s problems are a disappointment for shareholders and says that there will be an update on the brand when the full-year earnings are reported in August.

Operating discount department stores can be fraught – years of disappointing results plagued Wesfarmers-owned Target before it was effectively devoured by its successful sibling brand KMart.

Big W could certainly do with a bit of that Kmart vibe before Bardwell is forced to make a call on its future.

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