Kmart just opened a standalone home store and it genuinely doesn't look like a Kmart

Kmart has just turned an old Decathlon in Box Hill South into something that looks suspiciously like IKEA's cheaper, less Swedish cousin.

The new store is called K Home. It ditches Kmart's usual red and blue for an all orange fit-out, and instead of clearance bins you get 3,800 square metres of Anko furniture styled into actual rooms. Couches, mattresses, shelving and bookcases that used to be online only are suddenly something you can sit on before you buy.

This isn't Kmart dabbling. Anko already makes up more than 85 per cent of Kmart's sales and shifts over a billion items a year across Australia. Home and furniture is one of the retailer's strongest categories, so giving it a standalone showroom was less a gamble and more a formality.

QUT retail marketing professor Gary Mortimer called it a "really smart move" and effectively Kmart's own mini IKEA. He reckons the smaller footprint means Kmart can scale K Home quickly, slotting into old big-box sites around the country instead of needing a full department store's worth of floor space.

The timing is what makes this interesting. Australia's furniture and homewares market is worth about $19 billion, and while Kmart carves out its slice, the mid-market around it is having a moment.

Amart bought Freedom last year to build a $1 billion combined business with an eye on an ASX float. Adairs is closing its New Zealand stores entirely and trimming locations at home.

Fantastic Furniture's owner, Greenlit Brands, is selling up and exiting Australia altogether.

So while the competition merges, shrinks or heads for the exit, Kmart is opening a brand new format in a market where decent large-format retail space is genuinely scarce, backed by Wesfarmers money and a customer base that already trusts it for cheap, decent looking home stuff.

Kmart isn't the budget alternative to the home category anymore. It's quietly becoming the home category, and Freedom, Fantastic and IKEA should all be paying attention.

Would you swap a weekend trip to IKEA for a trip to K Home? Once this rolls out past Box Hill, that's the question that actually matters.