Wesfarmers steady, but electrical and technology categories stall

By Claire Reilly

Wesfarmers has released its half-yearly sales results today, with the owner of Bunnings, Target, Kmart, Officeworks and Coles posting growth across all its business divisions for the 6 months ended 31 December 2012. However, the company's managing director has said that issues with poor sales have centred largely on technology and electrical categories.

In terms of Wesfarmers electrical retailers, the strongest performer was Bunnings, which saw a 5.7 per cent increase in sales up to $4.01 billion, followed by Kmart (up 3.5 per cent to $2.36 billion) and Target (up 1.2 per cent to $2.12 billion). Officeworks edged up 0.3 per cent to $712 million while Coles boosted its sales to $18.33 billion, an increase of 4.7 per cent.

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Breaking down the company’s performance, Wesfarmers managing director, Richard Goyder, indicated the business was going well, though certain sectors were struggling.

“The retail businesses continue to improve their customer offers, with record numbers of shoppers visiting our stores during the Christmas period,” he said.

“Bunnings’ store sales increased…with comparable store sales growing 3.4 per cent. Good transaction growth in consumer and commercial areas, despite generally soft housing market conditions, is reflective of the strength of the Bunnings business.

“Officeworks continued to see solid growth in online sales, however, sales overall were flat due to ongoing deflation in technology related categories and continued challenging conditions for its small to medium sized business customers.

“Kmart’s total sales increased 3.5 per cent for the half, with comparable sales growing 3.0 per cent," he added. "This improving sales trend, supported by strong growth in transactions and units, reflects Kmart’s investment in low prices on everyday items.

“Target recorded total sales growth of 1.2 per cent during the half, while comparable sales were 1.8 per cent below last year. Target’s organisational capability was improved during the half with encouraging sales results recorded in a number of categories. Sales in electrical and entertainment categories remained challenging.”

The Bunnings store network increased by 10 stores in the half year, while Officeworks and Target each grew boosted their networks by 7 stores and Kmart increased in size by 8 stores.

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