Discount Store War

Reporter: Bryan Seymour

"The Australian dollar is simply re-directing the people on where they're buying and what they're buying from. It makes a big incentive to go online." Says Barry

It's the triple whammy that's left retailers bruised, battered - The strong Aussie dollar, the online shopping boom and the rising cost of living.

"Living expenses like rising food and petrol prices, oh, and cotton. Believe it or not, the price of cotton more than doubled in the last year. Hitting a 150 year high of $2.30 for a pound of cotton, right now it's at about $1.60 still well up. For the first time we share something in common with the big retailers. We're all paying more for less. That's why the party's over for big stores like this. Or as Kmart are telling us today. This is the end of the sale." Reports Bryan

"93% of Australian consumers now contend they no longer believe nor directly respond to advertising which promotes sales. So what they prefer is everyday lower prices." Says Barry

Barry Urquhart, managing director of marketing focus, says our big stores like target, big w and Kmart are adopting the sales strategy of the American giant, Walmart.

"That's the model for Wal-mart, and Wal-mart is the largest retail group in the world and it's cornerstone for success is that it allows consumers to choose when they buy, what they buy at what price because the prices are constant." Says Barry

"Does that mean i'll never see a sale on now sign?" asks Bryan

"No, you'll see at Kmart, lowest price all the time. We used to sell jeans for $40 now we sell 'em for $10 every day." Says Guy

Kmart managing director Guy Rossi agrees we've paid too much for two long. After nearly a decade of basically being bankrupt, he says Kmart is making money - by charging less.

"How much less are you spending to do your shopping in Kmart today than you were three or four years ago?"

"Oh, I would say at least 30% less." Says Guy

"How are you different to target or big w though?"

"Lowest price guaranteed? If we don't have the lowest price we guarantee that we'll match that price, yeah, absolutely." Says Guy

"It's not new in the rest of the world, it's just new here, you understand that people are suffering and actually can't afford what they used to be able to afford." Says Peter

Peter Morrissey is now the only top fashion designer with a discount range in our major stores. With two new lines every year at big w.

"Can't underestimate the customer, they've got to believe it while you're doing it." Says Peter

"Here's the men's suit this is the best buy, it's the jacket I'm wearing $79 for the jacket, $49 for the pants and the shirt is $34. Here's the men's suit this is the best buy, it's the jacket I'm wearing $79 for the jacket, $49 for the pants and the shirt is $34." Peter continues

The man and woman by Peter Morrissey range offer designer pieces for under a $100.

"Everywhere is discounts at the moment, so these things aren't on sale, these are their sale price, and that is why it's quite amazing because we're competing with the sales out there based on our original price." Says Peter

As we've heard. Sales are now disappearing faster than they used to claim the stock was. Pundits predict this new everyday, low cost model will see a dramatic shift in the fortunes of the big retailers.

"Target's doing better business, then Big W and Kmart quite a way behind, you've got a long way to go to get back that market dominance?" says Bryan

"And it's an exciting journey." Replies Guy

..And one that promises to save us all money.