A new Kmart opening in Melbourne has prompted suggestions the retailer is creating a “mini-IKEA” to take on its rivals in the discount furniture and homewares space.

Photos of the “K home” store at Box Hill were first shared this week by a user on LinkedIn.

The branding on the building features the familiar Kmart “K”, but in white writing on an orange backdrop – a departure from the usual red and blue logo. The imagery below it includes homewares items ranging from cushions and cooking utensils, to a lamp and chair.

The Kmart Group has confirmed the new standalone store will open on June 18, describing it as a “trial” that will bring together a “curated” home and living range in one dedicated space.

The K home concept store features fresh branding. Photo: Troy Verhagen / LinkedIn

“The space has been designed differently from a traditional Kmart store, with a more immersive home environment, curated displays and room-based inspiration to help customers explore the range in a more intuitive way,” Kmart Group chief commercial officer Callum Smith said.

“Customers have embraced Kmart’s home range for many years, and we’ve continued to grow our furniture offer as customer demand has grown.”

As well as “everyday essentials” and home styling products, the concept store will stock furniture and storage items that were previously available only online.

Smith said it would enable Kmart to showcase more of its range and also to gather customer feedback.

Although the retailer gave no details of any plans for more K home stores elsewhere in the country, it said the insights from the trial would help inform how it “continues to evolve its store experience”.

“At a time when value matters more than ever, this trial is about helping Australian families create a home they love at a price they can afford,” Smith said.

The store will stock some items that were previously only available online. Photo: Kmart

The latest move comes after Kmart – which is owned by Wesfarmers and has more than 300 stores across Australia and New Zealand – revealed an ambitious plan last year to double its turnover in the face of increasing competition from overseas outlets. Expanding its popular low-cost home brand Anko was at the heart of the plan.

Retail marketing and consumer behaviour researcher Gary Mortimer has suggested the K home store will be like Kmart’s version of a mini-IKEA – the Swedish-owned flat-pack furniture conglomerate.

“IKEA is very well known for being on-trend, fashionable and generally low prices, where you’re going to get that, but at a smaller level with Kmart, as I would hope to see them roll these K home stores out,” Mortimer told Yahoo Finance.

Mortimer, a professor at Queensland University of Technology, said it was a “smart move” for the retailer to build on its success in the furniture and homewares market with a stand-alone store.

“I think it’s good news for consumers because if you love the Kmart home brands products, now you don’t need to go to a full Kmart store.”

The Kmart Group – which includes Kmart and Target – increased its revenue by 2.9 per cent to $11.43 million in the 2024-25 financial year.

It makes sense for the group to increase its footprint in the furniture and homewares sector, which is estimated to be worth around $19 billion in Australia and tipped to grow further in the coming years despite the current cost-of-living crisis.

But while some retail experts believe the K home concept will be competition for major furniture retailers such as Harvey Norman, IKEA and Freedom, others suggest it will ramp up the pressure on stores specialising in soft furnishings.

“Kmart’s new home-focused format appears more centred on accessible home styling, decor and everyday household products,” Retail Doctor Group CEO Brian Walker told news.com.au.

“It’s probably more accurate to describe it as Kmart doubling down on the home category rather than becoming a direct IKEA replica.”

Kmart Group has said the Box Hill K home store will be 3800 square metres, including 3100 square metres of customer shopping space. By comparison, most IKEA stores are between around 25,000 and 38,000 square metres.