KMART managing director Guy Russo believes the carbon-tax debate is partly behind the current slump in retail spending, while constant sales and discounting by retailers are confusing shoppers and making them distrust shelf prices and keep their hands in their pockets.
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Consumers were fearful of future rate rises, with the carbon tax adding to uncertainty, creating some nervousness in the community.
''It just seems after the GFC that people have taken a whole new perspective on life, and they are being a lot more cautious,'' Mr Russo said.
The plethora of sales was devaluing the concept of a discount and confounding consumers.
To help combat this conundrum, and grab some customers from his chief rivals such as Big W, owned by Woolworths, Kmart will release a string of marketing and promotional campaigns this fortnight, taking in catalogues and television. The aim is to highlight the transformation of the business from a high-low pricing model to everyday low prices.
''I remember the old days when at David Jones you could count on two great sales a year and trusted them, and now everyone just seems to be doing this 'sale' thing … and consumers are not stupid,'' Mr Russo told BusinessDay.
''My read is I think they [consumers] are waking up to all of us, all retailers, and are not happy. I don't think it's honest pricing from the outset.''
Mr Russo said overseas tours of leading retailers proved to him that the everyday low-prices model worked best and was one the customer trusted the most as well.
To back up his transformation of Kmart's 170-store network to the different pricing strategy, Mr Russo pushed through a new-style catalogue for the Wesfarmers-owned chain last weekend to showcase the price-competitive and quality range of his clothing, footwear and homewares.
''The high-low was removed slowly over a period of a year and I claim today we have probably dropped prices close to 30 per cent,'' he said.
To bolster Kmart's margins in the wake of sharply lower prices the company has cut a swathe through its middle management ranks and forged closer links to its suppliers in China, putting up to 150 buyers on the ground to more efficiently snare goods at lower prices.
