The competitive David Jones department store is closing 35 of its grocery stores that opened less than two years ago
- David Jones is closing 35 of its mini-food halls connected to BP gas stations
- The group said the pilot that began in 2019 will be discontinued
- Industry experts said the company’s larger food halls are also threatened with closing
- In response to the surge in online shopping, the luxury department store moved into groceries
Contested department store David Jones has suffered another blow as they prepare to close another 35 of their stores after opening less than two years ago.
The upscale fashion retailer has teamed up with BP to open miniature versions of its grocery halls attached to gas stations in Sydney and Melbourne.
Although customers didn’t find the unusual peeling tasty, David Jones said Friday that the pilot would be stopped entirely.
BP will close all 35 mini-food halls (pictured) connected to BP petrol stations
The stores sold luxury groceries (see picture) but didn’t have the same customer service as a DJ store
“All 35 existing David Jones BP locations with two brands will be converted to a new BP convenience offering,” the company said in a statement.
David Jones said the move was part of a strategic grocery review to focus solely on bespoke grocery store experiences with us [Sydney CBD] Elizabeth Street and Bondi Junction Locations’.
Two independent David Jones food halls in Melbourne – in South Yarra and Malvern – closed earlier this year. The food hall attached to the Melbourne CBD store was closed for renovations until 2022.
Industry insiders say the move could signal that department stores’ entry into the grocery store is being abandoned altogether.
“It was a great strategy, but putting it in at gas stations hurt the experience,” QUT marketing expert Associate Professor Gary Mortimer told news.com.au.
The DJs didn’t sell it. It was the BP guy behind the counter so the experience was different from going into a food hall. ‘
The mini-food halls even offered fresh fruit and vegetables that could be bought at the petrol stations
The entire company is making money – it reported a 33 percent increase in profits in February to $ 56 million for the last half of 2020 – thanks to the improvement of its online shopping offerings combined with rent relief and JobKeeper support.
Though the food side of the business continues to struggle with parent company Woolworths Holdings CEO Roy Bagattini admitting in 2020 that they were at a loss and the company was trying to make them profitable by 2022.
The BP partnership was part of this plan by Woolworths Holdings – a South African company not affiliated with the supermarket chain – with 10 gas stations announced in 2019, followed by an expansion to 35 in 2020.
While experts said the products themselves were quality customers, customers were mistaken for the BP pairing
DJs’ entry into the food business was driven by the rise of online shopping and international fast fashion outlets such as H&M and Uniqlo in Australia, shrinking the customer base significantly.
Gourmet food halls were seen as a way to keep the stores’ luxury branding and still give customers a reason to visit them in person.
“That may not be feasible and they may choose to leave the food category entirely at some point,” said Prof. Mortimer.
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