By Claire Reilly
Wesfarmers has released its yearly financial results, showing a healthy boost in retail sales results for its Home Improvement offering, which includes its Bunnings warehouses, small format stores and trade centres. However, this success wasn’t seen across the board, with the company posting lacklustre figures for its Target, Kmart and office supplies sectors.
For the 52 weeks ended 24 June 2012, the company's main offering, Coles, saw a 6.1 per cent increase in sales. During this time, total sales for Bunnings were $7.2 billion, up 5.6 per cent on the prior corresponding period. This represented a 5.9 per cent boost in total store sales and a 3.9 per cent increase in store-on-store growth.
However, Target saw disappointing results, with total sales sliding 1.8 per cent compared to the previous financial year, despite fourth quarter growth of 2 per cent. At Kmart, total sales remained unchanged at $4.0 billion year-on-year, despite a 2.2 per cent increase in total fourth quarter sales.
Finally, Wesfarmers' office supplies segment (which includes sales from Officeworks and Harris Technology) posted total sales of $1.5 billion, up just 0.7 per cent from the previous year. The company ended the year with 139 Officeworks stores, after opening 5 shopfronts and closing/rebranding 3 stores, while Harris Technology had 2 stores at the end of the year after 1 store closure and 1 store rebranding.
Wesfarmers’ managing director Richard Goyder spoke about the company’s overall results, before addressing the individual businesses in turn.
“Over the year, all of our retail businesses have worked hard to deliver an improved customer offer and genuinely better value,” said Goyder. “This has seen a strong focus on reinvesting savings made from improved business efficiencies into lower prices for our customers.
“Bunnings made good progress on all aspects of its strategic agenda, resulting in strong transaction growth despite generally tight trading conditions and the deflationary impacts of the range reset program.
“Officeworks faced deflationary headwinds during the year, particularly in the technology and furniture categories. Strong transaction growth was achieved across all channels, in particular online.
“Kmart reported sales in line with last year, as sustained growth in volumes was offset by continued investment in delivering lower prices for customers on everyday household items.
“Target experienced challenging trading conditions during the year,” he concluded. “Encouragingly, the underlying sales trend improved progressively over the second half and through the fourth quarter, as a number of new strategic initiatives were implemented.”