The biggest hurdle to reducing prices in remote stores is the supply chain. Existing suppliers to community stores hold the monopoly on what products are available, leaving community stores with very little bargaining power and high prices in store.
For a long time, AIG has been talking about the need to shake things up – to investigate the plausibility of creating a supply centre in Katherine that supplies directly to the Katherine region. Last week we started the ball rolling by taking a Kmart team to Barunga to visit the store to get a feel of the supply possibilities.
K Hub opening in Katherine is exciting
The Kmart team were in Katherine converting the Target Country store into a K Hub. Following a Welcome to Country smoking ceremony by the Banatjarl Strongbala Wimun Group on Wednesday Jan 27 the doors flew open for customers to enjoy some of Kmart’s great value kids, home and clothing products.
“We’re very excited about the Katherine K Hub store opening and the opportunity to not only connect with the community and provide employment but also offer a great selection of products for the people of Katherine” said Kate Thiedeman, Head of Community at Kmart Australia.
“One of the reasons we were in Barunga was to see how a community store operates and how important it is to Aboriginal people living in remote communities ” said Kate. Much of the visit was spent looking at the shop layout, supply model and assessing what can be viable when helping to stock smaller stores. There was also time spent talking to people who work in the shop about what people might want from Kmart in their store.
This conversation started a while ago
“We started the supply conversation with Kmart about 18 months ago, exploring the possibility of supplying to the stores we manage in Barunga, Timber Creek and Yarralin” said Steve Smith, CEO of AIG. “This is our second order from Kmart, the first was in November 2020 and the products raced off the shelves. We’re starting with a conservative approach to determine what best meets the needs of the communities”
Impressed by what they saw, the Kmart team were keen to come up with a plan that will work in a community setting. “I love the store. It’s so beautiful and neat and the pricing makes it accessible for everyone. From a visual merchandising point of view, product is displayed really well and the range is really impressive” said Kate.
Next steps
“The next step is to work out how we can best fulfil the needs of the community with AIG to work out how we can assist in the development of more stores just like Barunga and to narrow in on what the community wants and needs in these stores. We’re hoping this the first of many visits to this community and others” explained Kate.
