Big W, the Australian discount department store chain, has reported a $64 million profit for the 2026 financial year, a significant turnaround from a $33 million loss in 2025. The result comes after a years-long slump that saw it close 30 stores in 2019, leaving it with 178 locations compared to Kmart's more than 300.
Managing director Dan Hake said the chain was in the early stages of a transformation focused on lower prices, better products and greater efficiency. "We can step up our game in product. We can be absolutely competitive on price, and we can be lean and consistent enough in our operations that we can still make a profit at the end of the year," Hake told the Sydney Morning Herald and The Age. "That's just step one."
The turnaround strategy includes renovating stores, investing in clothing, health and beauty, and homewares, and maintaining strength in core categories like kids' apparel, books and toys. About 80 per cent of the womenswear range is now priced under $20. Hake said the chain was aiming to become more front-of-mind for customers, particularly families. "We know that families spend on their kids first, but we also want mum to have a great experience," he said.
However, Big W's comeback narrative is shadowed by the dominance of Kmart, which has built a loyal following through its in-house brand Anko and a supply chain that delivers on-trend designs at low prices. Portfolio manager Jun Bei Liu of Ten Cap, who visited Kmart last week but has not been to Big W in seven years, questioned the chain's brand identity. "I really don't know what that brand stands for, Big W," she said. "If I have to travel far and wide to find this store when it's not convenient, and it doesn't provide all the categories I need, why should I go there?"
Academics noted Kmart's cultural cachet. RMIT University's Dr Marian Makkar said Kmart had eliminated the bargain stigma, making it cool to shop there, while Macquarie Business School professor Jana Bowden described the chain's brand love as an X factor that sells a value consciousness and a cultural moment.
Big W cannot replicate Kmart's private-label-heavy model, which sees 85 per cent of sales from its Anko brand, as it must also serve as a "house of brands". Hake acknowledged the challenge of competing on price and quality at scale across all categories. "If you've got a product and that product is even 10¢ cheaper at the competitor next door, that's where they're going to shop it," he said.
Speculation about Big W's future has simmered since Woolworths chief executive Amanda Bardwell announced a strategic review of the business portfolio in early 2025. In August, the company said it would separate Big W's technology systems from Woolworths, a move often seen as preparing for a potential sale or demerger. Liu questioned whether Woolworths would give the turnaround the three years it likely requires. "I'm just not sure if Woolworths is that committed," she said.
Hake declined to make specific predictions about the chain's future ownership, but said the focus remained on executing the turnaround. The chain is also facing new competition from Canadian dollar-store giant Dollarama, which acquired The Reject Shop early in 2025 and is rebranding its stores, potentially adding further pressure to the discount retail segment.