Kmart's decision to bin selling DVDs and CDs blamed for first half profit slump

Wesfarmers operates 531 Kmart stores across New Zealand and Australia. Photo / File

Kmart's decision to scrap its popular range of DVDs has been blamed for a slump in profit at the discount department store.

The chain has become a pivotal earner for the Wesfarmers conglomerate since the demerger of Coles last year, but the move to ditch selling bargain DVDs and CDs didn't go down well with shoppers in Australia.

This has contributed to the retailer experiencing a lull in trading in the six months to December 31 after several years of consistent growth.

When the decision was made to ditch the range of DVDs last year, a Kmart spokesperson said the division would focus on selling its own range of products.

"As part of Kmart's expanding range of in-house designed products, we have made the decision to exit DVDs, CDs and Blu-ray products so as to allow space within the store for our new creative and activity-based kids products," they said.

"We won't be stocking these items online as our decision to exit is across both in-store and online."

A number of mothers vented their frustration at the time, labelling the decision as "stupid".

"My daughter likes to watch ABC iview but we can't afford the amount of internet it takes to use that so I've relied on Kmart to buy kids DVDs," said Devonport mum Shelley Brokey.

"I know that's the way the world is going but some people just can't afford Netflix or even afford good internet with lots of data."

Also weighing down on the business was the problem of weak womenswear sales.

It also said there had been lower demand for everyday products due to heavy discounting the year before.

The retailer's performance deteriorated in the pre-Christmas sales period through late November and December, and for the half-year ended sales fell 0.6 per cent.

Wesfarmers, whose board includes former New Zealand Prime Minister Bill English, said at its annual general meeting in November that sales at Kmart had slowed from the year earlier.

The slowdown would see Kmart earnings before interest and tax from its department store division for the half-year fall to between A$385 million (NZ$406m) and A$400m (NZ$422m), compared to A$415m (NZ$438m) in the first half last year, Wesfarmers said.

The ASX-listed company will announce its half-year results on February 21.

Wesfarmers operates 531 Kmart stores across New Zealand and Australia.

Kmart is set to open a string of stores throughout New Zealand this year, including in Rotorua, Invercargill and Auckland's Sylvia Park. Last year it opened new stores in Queenstown and Lower Hutt.

- Additional reporting from News.com.au