K Home could help Kmart tackle IKEA in NZ, brand researcher says

Kmart is understood to be pondering a furniture-only shop in New Zealand, and one brand performance analyst says it could be a defensive play against IKEA.

Kmart has opened a K Home in Melbourne, which is smaller than a full-size Kmart and has been described as a "mini IKEA".

Kmart said it had no confirmed plans yet for a New Zealand K Home. Its managing director told media there is room for 50 K Home stores across Australia and New Zealand, if the Australian trial goes well.

Sam Brough, head of brand at brand research firm Tracksuit, said IKEA was putting pressure on Kmart.

"While everyone expected IKEA's launch late last year to make waves, watching the shopping habits of Aucklanders shift over the first half of 2026 has been incredible.

"It's clear from the massive traffic they saw at their Auckland store, welcoming over 1.7 million visitors in their first six months alone, that they've captured a huge slice of consumer attention right out of the gate."

Research from Dot Loves Data showed the arrival of IKEA had changed the pattern of Auckland homeware shopping.

Brough said Kmart had been an "affordable homewares powerhouse" in New Zealand for years.

"A massive 90 percent of consumers are aware of the brand in New Zealand, which is an incredibly strong footprint. But no matter how big you are, a challenger like IKEA is going to pull focus. We're seeing that play out now in our data. IKEA is steadily climbing when it comes to people actively researching and buying from them, with both their investigation and usage metrics jumping by five percentage points over a few short months.

"Meanwhile, Kmart is feeling a bit of a temporary chill - the number of consumers who prefer shopping from the store recently dipped four percentage points down to 19 percent. While this is still higher than IKEA, whose preference numbers sit at 17 percent, Kiwi shoppers are clearly exploring the new option. That's a direct challenge to the market share retailers like Kmart and others used to count on."

Brough said a K Home in New Zealand could be a clever defensive play.

"They know they can't just sit back on their laurels and they do have the brand credentials to pull off a new category play in a way that most retailers can't."

Retail consultant Chris Wilkinson, of First Retail Group, said many built-up areas did not have space for Kmart, let alone IKEA. In that context, a K Home could make sense.

"We're getting a lot more people living around our city centres and in some urban environments where they're not necessarily driving to places anymore, they're much more reliant on public transport … And so because of that, this type of model will work well and it potentially also can play into those areas which don't necessarily sustain a full-size Kmart, but could quite easily sustain a smaller format-type store.

"Kmart is typically in bulk retail areas or destinations around the country. They're not easily accessible by our apartment dwellers and city centre homeowners."

He said it would be complementary to other retailers because the market was different. "We've always said with these types of environments whether it's IKEA or Kmart, that's where the shopping journey starts, it doesn't necessarily end there.

"Design-led affordability is a key thing here. Very much on-trend type products that people are constantly wanting to change up their home environments now. They're being inspired by the likes of Master Chef, they're being inspired by Grand Designs, and these programmes have always been a catalyst for driving awareness and getting people into stores and making them think about what they could potentially do with their home environments."

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