Kmart made one crucial change that boosted its profit. Officeworks is now following suit and Bunnings is taking notice

One of Australia’s top executives has revealed how a crucial move behind Kmart’s success is being deployed at Officeworks and influences operations at Bunnings.

Rob Scott, the boss of Wesfarmers – which runs the three aforementioned companies in Australia alongside Target – revealed how Kmart’s supply chain Anko is being replicated for Officeworks.

Anko was established in 2019 and now provides about 85 per cent of Kmart’s products.

Mr Scott said Anko was a “real success story” and stressed the model would help deliver better value for Officeworks customers.

“It’s been really exciting to be able to leverage that capability into the Officeworks business by using that sourcing capability and design capability,” he told News24 Business Weekend.

He also noted that Bunnings’ managing director Mike Schneider said the company had “learned a lot from Anko”.

“The difference within Bunnings obviously is that Bunnings is quite deliberately a house of brands,” Mr Scott said.

“A lot of the products in Bunnings really lend themselves to highly trusted brands, but there is a segment of the Bunnings product range that really does benefit from direct sourcing (and) private label.

“Mike and the team are certainly leveraging some of that know-how from the Kmart Anko team.”

The shift at Wesfarmers follows the company delivering its 2026 financial year results on Thursday.

Its profit was down 1.8 per cent to $2.87 billion and earnings at Officeworks dropped 22.2 per cent.

Wesfarmers blamed the decline on “one-off transformation costs” of transitioning to Officeworks’ new Anko-like model.

Despite the profit fall, Officeworks’ revenue lifted 3.7 per cent to $3.7 billion.

Mr Scott said the company was still aiming to keep prices down across its subsidiaries while undergoing changes.

“What we do on the pricing side is our philosophy is always to be the lowest price,” he said.

“For businesses such as Bunnings, Kmart, and Officeworks, we pride ourselves in everyday low prices.

“We monitor prices multiple times a day in order to keep our prices low and our philosophy with everyday low price is … if we can actually achieve some cost savings on sourcing product then we want to share those benefits with our customers in lower pricing.”

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