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David Jones' first mini-supermarket to open next year

David Jones will open its first mini-supermarket in Melbourne's swanky South Yarra next year, as it bets food can counterbalance lagging sales in its department store business.

The 500-square metre store will open in 2019 at the Capital Grand apartment building currently under construction on the corner of Toorak Road and Chapel Street.

David Jones said it would be the first of several standalone food stores it will open nationally, alongside the rollout of its food concept inside a number of department stores.

The standalone stores will focus on top-end fresh produce and pre-prepared meals, vegetables and salads targeting the suburb's affluent and time-poor residents.

It will be about a tenth the size of an average Coles or Woolworths store.

"Our customers want us to provide provenance, freshness and convenience but also that our offering needs to be accessible to their busy lives," David Jones' chief executive David Thomas said. 


"We are confident the new David Jones Food proposition will resonate strongly with the local customer delivering a new level of food quality and experience to the area.”

The store has launched its own private label food line called David Jones Food, which would make up a majority of products at the store, including 90 per cent of fresh food, it said.

David Jones is investing $100 million over three years to roll out its food offering. It opened its new-look flagship food hall in its store at Sydney's Bondi Junction late last year, followed by a smaller concept store in Wollongong.

A third in-store food hall will open at Malvern, in Melbourne's south-east, in March.

The store's South African owners Woolworths Holdings has high hopes for its investment in an up-scale food offering as it stuggles to arrest a decline in sales and profit from the main David Jones department store business.

Woolworths last week slashed the carying value of its $2.1 billion investment in David Jones by $712.3 million, mostly relating to goodwill.

David Jones' comparable sales fell 3.3 per cent in the six months to December 24, while profit last financial year tumbled 30 per cent.