Wesfarmers starts the new financial year with moderate growth

By Claire Reilly

Wesfarmers – parent company of the Bunnings, Officeworks, Target, Kmart and Coles retail chains – has announced its quarterly results today, with all categories showing modest growth for the start of the 2013 financial year. While news was positive, especially amid a difficult retail climate, none of the retail brands saw sales increases of more than 5 per cent.

Leading the pack was Wesfarmers home improvement sector, namely Bunnings, which saw an increase in sales of 4.7 per cent for the quarter, up to $1.8 billion. Discount retailer Kmart also saw a slight boost, climbing 3.1 per cent to $956 million in sales.

Target and OfficeWorks had more moderate gains, with Target reaching $853 million in sales (up 2.2 per cent) and the Wesfarmers office supplies division edging up by 0.3 per cent, or $1 million, to $362 million. Supermarket giant Coles also received a 4.2 per cent boost to sales, up to $8.4 billion for the quarter.

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Speaking about the results was Wesfarmers managing director, Richard Goyder.

“Sales growth was recorded in both consumer and commercial segments despite subdued housing market conditions,” he said, speaking about Bunnings’ performance. “This growth was evidence of the sound execution of Bunnings’ strategic agenda which includes ongoing improvements in merchandising and investments in service, price and the store network.

Speaking about Kmart, he noted that the retailer had its eleventh successive period of “solid comparable growth in transactions and units” due to a positive customer response to its pricing and merchandise offer.

“Target’s underlying sales trend continued to show improvement, providing confidence in the division’s transformation plan,” he added. “Customer numbers increased as Target focused on improving its in-store offer, promotional effectiveness and communication of the quality and value of its product range.”

Finally, Goyder noted that Officeworks has seen good growth in online sales, “offsetting challenging conditions associated with a subdued trading environment for many of its small to medium sized business customers and high levels of deflation in technology related categories”.

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