Kmart Group managing director Aleksandra Spaseska told analysts on Wednesday that 16 of the roughly 300 Kmarts in Australia had already been converted to the "Plan C+" format, which features entry and exit gates and relocated cash registers.
"It is delivering improved space allocation, better visual merchandising, and an enhanced beauty experience," Ms Spaseska said.
The format is also driving higher sales through increased cross-shop between departments, with shoppers buying more items per basket, she said.
As a result Kmart Group is increasing its investment in the transformation program and expects to have 40 stores trading in the new format by the end of 2026/27.
Kmart relocated its cash registers to the middle of its stores from 2012 to 2015, in a move that was widely panned by customers.
The Wesfarmers-operated retailer will also open a new "K Home" concept store in the eastern Melbourne suburb of Box Hill next week, which is being trialled as standalone home and furniture destination.
"It is designed to test whether we can unlock a bigger home opportunity through a through a more immersive format that showcases the breadth of the Anko range in a way our full line stores cannot," Ms Spaseska said.
The store features curated displays, room-based inspiration and a more immerse home environment, as well as showcasing products that are online-only because of space constraints in traditional Kmart stores, she said.
"We will use the trial to learn quickly, refine the model, and assess the longer term opportunity," Ms Spaseska said.
Kmart's 10-hectare automated customer fulfilment centre in the western Sydney suburb of Moorebank remains on time and on budget and when it opens in 2027/28 will make the group's supply chain more resilient, efficient and scalable, she said.
The retailer's online marketplace, which opened in May 2025, now features 130,000 products from 90 sellers.
Kmart has also expanded its rollout of RFID tags to include most of the apparel it sells to deliver better on-self availability and inventory integrity.
Ms Spaseska said that in the past few months, customers had become more discerning and value-conscious and had been buying fewer items.
"We can see from all of our customer data, households are very much focused on cost of living," she said.
"It is the number one issue on their mind, and thinking about how they make household budgets work and how they find more value is really critical."
