Big-box furniture retail gets a new player in Australia - and why New Zealand could be next
Tuesday, 23 June 2026
If Mitre 10 and IKEA were to have a baby it would no doubt look like K Home.
Retail giant Kmart has made a bold move, hoping to give Swedish furniture giant IKEA a run for its money, and itself the space to display more of its products set up in store.
The popular low-cost department store chain has opened a large format 3100m³ standalone furniture-focused store in Melbourne created, it says, “to bring customers a dedicated home and living destination”.
The Box Hill South store sells only furniture and its own branded Anko goods. Anko is Kmart’s home brand that has been performing phenomenally well, resonating particularly strongly with customers in Asia.
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In the Philippines, Kmart operates eight standalone Anko stores.
A Kmart spokeswoman said the retailer believed there was “significant long-term opportunity” for the brand across Australia and New Zealand.
The Melbourne K Home store opened on Thursday, in a pilot concept. It displays and sells a selection of furniture and storage products that were previously only available online.
Kmart says if the pilot goes well, it could lead to more K Home stores opening — including on this side of the ditch.
“Our immediate focus is on the Melbourne pilot store and understanding the long-term potential for K Home,” a spokesperson said.
“Any future expansion - whether that be in Australia or New Zealand - would be considered over time and be dependent on a range of factors, including the success of the pilot and the availability of suitable locations.”
So far there had been “a great response” to the store.
K Home is operating as a spinoff of Kmart, using the same logo, alongside orange branding.
Kmart Group general manager of store experience Courtney Keeble said the Melbourne trial would help the brand “make more of the range accessible.
“At a time when value matters more than ever, we’re focused on helping customers create a home they love and are proud of, at a price they can afford.”
Retail analyst Juanita Neville-Te Rito, managing director of RX Group, said K Home was a smart move but perhaps not for the reasons people think.
“On the surface, it looks like a direct challenge to IKEA. There's a dedicated homewares and furniture store, a strong own-brand offer, room settings and elements of the cash-and-carry model. The visual cues are definitely there. But I don't think Kmart is trying to become IKEA,” Neville-Te Rito told The Post.
“What Kmart is really doing is giving one of its strongest categories a stage of its own. Home has been a major growth driver for years and this format allows them to expand that offer without the capital intensity of opening more full-line stores.”
Neville-Te Rito said Kmart didn’t need to win the furniture market to make this successful. “If anything, the bigger opportunity is taking share from mid-market home retailers by offering affordable design-led products at scale.
“Kmart has spent years building credibility around its Anko range, and K Home gives that brand a destination.
“From the feedback we've received from people who have visited the Box Hill store, the reality is a little different from some of the pre-launch hype. The store appears to be less furniture-focused than many expected, with décor, linen, appliances and homewares still making up a significant part of the offer.
“The overall impression was closer to a larger version of Kmart's home department than a completely new retail concept.”
She said the big-box format played to Kmart's strengths.
“Most shoppers observed leaving the store were carrying décor items rather than larger furniture purchases. An interesting aspect is that much of the furniture range remains available is online only rather than immediate take-home purchase. In that sense, K Home is as much a showroom as it is a store. Customers can see, touch and experience products that previously existed only on a screen, which helps reduce purchase hesitation and builds confidence in larger-ticket purchases.
“Kmart has always excelled at helping customers refresh their homes affordably, and K Home may simply give them more space to do what they already do well,” she said.
Kmart recently moved its checkouts to the front, of its stores removing the need for staff members to scan receipts as customers left. A process set up in the stores 10 years ago.
That decision, coupled with the K Home model, showed Kmart was “a retailer that is willing to test, learn and, importantly, change course when customer behaviour tells them to”, Neville-Te Rito said.
“As for New Zealand, I think the concept could absolutely work here, but not because it would replace IKEA. The two retailers serve different missions. IKEA is a destination purchase. Customers plan trips, furnish entire rooms and enjoy the experience of discovery. Kmart is about accessibility, convenience and value.
“The real question isn't whether K Home can beat IKEA. It's whether there are enough New Zealand shoppers looking for affordable, design-led home products who would welcome a larger and more specialised Kmart offer.”