David Jones unveils $100m food strategy
Department store chain, David Jones, has unveiled its $100m food strategy, aiming to build a retail food business that draws on design elements from the world’s top food sellers and gets younger generations back in-store.
David Jones’ new gourmet food offering will kick off at Bondi Junction in Sydney’s east within seven weeks time and will showcase the retailer’s attempt to tap into the $100 billion food sector.
Taking cues from Switzerland’s Globus, Eataly in New York, and La Grande Epicerie under Bon Marche in Paris, the revamped food offering will incorporate integrated dining developed with well-known chef and restaurateur Neil Perry, as well as cafes, butcher shops, bakeries and seafood counters plus prepared meals and packaged groceries.
Westfield Bondi Junction will be followed by a food market in GPT Group’s Wollongong Central shopping centre, then Melbourne’s Bourke Street store in November.
When Woolworths Holdings acquired Australia’s oldest department store retailer, food “was never part of the rationale of the acquisition” according to Pieter de Wet, group food executive, David Jones. But the South African based retail group – which is now predominantly a food business with over 400 food stores generating over 60 per cent of its turnover today – quickly recognised a gap in the market.
Pointing to a survey undertaken with a sample of its customers, de Wet said customers felt limited in their food options and gravitated towards big supermarket players only because they had no choice and it’s a case of “whichever one is closest on the way home.”
“So there’s no emotional connection that exists with specialists, so their local barista, baker, that they have the connection they love their experience from.”
De Wet said when asked about DJs food offering, its customers were unanimous. “They basically said that from a food point of view, we had fallen off the map completely”
“If you speak to the 35 years old and under generation, there’s no reason for them to come to David Jones today because it’s not kept up with the times…they basically said to us if you’re going to do food, make sure it’s not just a small evolution, make sure it’s a massive step forward otherwise it’s not going to really interest us.”
When asked by assembled media about Amazon’s $13.7b acquisition of WholeFoods in the US, John Dixon, David Jones CEO said it showed the US giant is changing its strategy after understanding the importance of stores. “They initially started selling books online…the acquisition of WholeFoods shows that they understand that its important in this day and age to have both an online and store operation.”
“Certainly when you think about the opportunity and strength of David jones, we already have a great store network, nationwide coverage and we’ve got an online business which is going very nicely that we are about to re-platform in September.
“We’ve brought over an expert from the UK to spearhead our online growth and what we know is when customers actually shop across what we call both channels, they are the most important and valuable customers to us. So I think we are very well placed because we have what we call a connected retail strategy.”
Read more about David Jones’ new food strategy in next week’s magazine.