David Jones’ push into food
After announcing a $168 million dollar profit this week, David Jones chief executive officer Ian Moir has made it clear he has his sights set on creating a premium grocery store offering fresh food products and a range of prepared meals
All this is now part of the increasing competition in the supermarket industry with German retailer Aldi disrupting the duopoly of Coles and Woolworths, eating into their market share.
“Aldi is there and is taking market share like there’s no tomorrow,” Moir told Smart Company.
“They’re not looking to the top end of the market and that’s where we want to
To get the food offering going, David Jones has brought in celebrity chef Neil Perry.
DJ’s recruited Perry in July. It’s brought him in to make its food halls look more with it and contemporary.
DJ’s is clearly looking at the success Perry has had at Rockpool, turning the place into the sort of venue that was a drawcard for anyone who wanted to be seen anywhere. Added to that is Perry’s work as a consultant chef to Qantas, doing wonderful things to of all things airline food.
The upmarket retailer is clearly hoping Perry will bring a touch of Rockpool to its food halls.
David Jones is expecting to open its first grocer at its Bondi Junction store before the end of the year. This will be the first step in what will be a wider rollout.
Moir expects David Jones will have a reasonable sized and profitable food business within three years.
Dr Michal Carrington, lecturer in marketing at the University of Melbourne says David Jones is carving out a unique niche as none of the other retailers are offering high end food.
“Retailers like Marks and Spencer, they’ve been playing in this zone for a while now,” Carrington told Smart Company.
“Here, David Jones have found a niche, and they’re going to be incredibly picky about what they’re putting in those stores.”
“They know they have high value customers who can easily convert. They understand the supply chains and have things already in place.”
David Jones’ parent company, the South African based Woolworths Holdings, plans to invest up to $100 million over three years with the aim of creating a profitable food business within the Australian marketplace' by 2020.
The company has already budgeted for losses of $5 to $10 million for 2017-18.
However Moir expects the benefits will be apparent in 2019 following an initial period of losses.
by Leon Gettler, August 26th 2016
