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David Jones Invests $100 Million to Enter High-end Food Sector

Posted by on September 1, 2016 at 8:10 AM

It’s not every day you hear a large company rewrite its game plan to enter a completely new industry. David Jones a well-known brand across the country has announced that it will be having a transformative few years ahead because they have decided to enter the food industry. Ian Moir, CEO of the South African parent company Woolworths Holdings has warned investors to expect large losses over the next two years.

David Jones Invests $100 Million to Enter High end Food Sector

Mr Moir’s vision to diversify the company into Australia’s best top end food business may be a shock to some, but if this move has grabbed your attention you can expect to see David Jones monetise on the supplier relationship it has from Woolworths. The end goal is to have a premium food offering to customers that helps David Jones stand out from the rest in the market.

 

What is their angle?

David Jones Invests $100 Million to Enter High end Food SectorThe $100 million investment will be used to diversify the David Jones as we know it into a quality, innovative premium food chain. The majority of companies out there currently in this industry are all scurrying to feed the discounted bottom end of the pile and are driven on price. David Jones on the other hand is going to target the top end of the market, similar to Marks & Spencer in the United Kingdom.

Woolworths Holdings are the one that will be investing $75 million to $100 million over the next three years into the diversification plan. The company expect to experience losses of $5 million to $10 million during the 2017-18 term with the potential of returning to profit by 2019. This is of course the plan but not everything goes to plan as it should. Dick Smith was a recent fatality that the Australian public had to witness, so how will this change be received?

David Jones Invests $100 Million to Enter High end Food SectorDavid Jones will be building a new store as part of its key strategy to win customers with its new product offerings. The store will be built on Sydney’s Elizabeth St. over the course of the next three years and expect it to be the “most beautiful store in the southern hemisphere”, claims Moir.

The new style of high-end supermarket will also contain a restaurant downstairs fronted by the celebrity chef Neil Perry.

 

The Future

David Jones is still intending to grow other parts of its business, it opened its first store in New Zealand in July 2016, albeit a smaller store format has been assumed to allow the brand to establish itself in the new territory.

We should also start to see more targeted deals and online discounts coming from David Jones because they are investing into its online shopping platform to benefit Australian customers. Their new customer relationship management program should allow the company to receive better feedback on what we actually like. Additionally they are also upgrading its terribly dated merchandising system to be more in line with those used in South Africa. It’s about time certain brands caught up with the rest of the world in my opinion.

As the company gets closer to the launch of its new high-end food branch, Buckscoop will keep you notified of any introductory offers and important information about trying the new products at discounted prices. Plus, if you have any comments on this new play from David Jones, please let us know in the comments section below, we would love to hear from you.

David Jones Invests $100 Million to Enter High end Food Sector


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