Kmart shoppers to save hundreds

Kmart promised it will not produce "cheap and nasty" clothing items as it increases sales by keeping prices low.

Kmart shoppers are set to save hundreds of dollars each year as it slashes the cost of clothing items by manufacturing in Java, Indonesia.

Nine's A Current Affair reports some clothing will be reduced by more than 20 per cent as designers claim they can order on such a scale that their goods are cheaper and of better quality.

Kmart has arrived in Java, Indonesia. Photo / A Current Affair

"Customer expectations are rising at an incredible rate," Kmart managing director Ian Bailey told A Current Affair.

"We sell 800 million things a year. You don't have to make a lot of money on each thing for it to still be a very profitable business," Bailey said.

Kmart promised it will not produce "cheap and nasty" clothing, as it increases sales by keeping prices low.

Bailey said a lot of Australians were "doing it tough" and a few dollars saved on clothing could make a huge difference.

The company also vowed to not let profits get in the way of protecting the environment.

"All of us are looking for factories that do the right thing and pumping waste into rivers is no good to anyone in the long run. No good to us, no good to the community," Bailey said.

The beginning of Kmart operations in Java marks a shift out of manufacturing behemoth China. However, Bailey said the move from China - because of rising wages - did not mean slave labour conditions at the company's facilities in Java.

Shoppers are set to save hundreds each year. Photo / A Current Affair

"There's a minimum wage which is set by the area, which all these people are governed by, and many are paid more than that because they do a little bit of overtime and their base hours are a 40-hour week, Monday to Friday," he said.

Items to be reduced include board games, exercise mats, kitchenware and clothing.

The first 320 reduced-price items will hit shelves this week, and hundreds more will come throughout the year.