Coles’ supermarkets business has set a high bar for rival Woolworths (WOW) to match with a noticeable quickening in the rate of top line and same store sales growth in the first quarter of the 2014-15 financial year.
In fact that strong sales growth at Coles was matched by similar outperformance at Bunnings and Officeworks which has more than countered continuing weakness at Target in the quarter.
The bottom line is that Wesfarmers (WES) said total retail sales rose 4.6% to $13.6 billion in the September quarter, a touch quicker than in the 2013-14 financial year.
Wesfarmers said yesterday that same-store sales at Coles grew by a better-than-expected 4.3% in the three months to September, up from growth of 4.1% annual rate seen in the fourth quarter of 2014 and much faster than the 3.7% reported for all of the 2014 financial year.
With four new supermarket open in the quarter, Coles’ total sales rose 5.8% to $7.3 billion.
That was a faster rate of growth than the 5.6% reported for the 2013-14 financial year.
Same-store sales in food rose 5%, indicating that liquor sales continued to go backwards as Coles’ chains (Liquorland, First Choice and Vintage Cellars) continue to lag and are being outperformed by the chains (Dan Murphy and BWS) owned by rival Woolworths.
WES vs WOW 1Y – Coles Q1 sales lift 4.3%
At Bunnings, the continuing housing and renovation boom boosted same-store sales rose 8.2% slower than the 10.3% seen in the fourth quarter 2014 (on par with the 8.4% seen over 2013-14) but well ahead of forecasts around 7%.
Including new stores, Bunning’s total sales rose 11% to $2.2 billion, a touch slower than the 11.7% seen in the 2014 financial year.
Officeworks also performed well, with total sales rising 8% to $403 million.
Kmart’s same-store sales rose 0.9% (1% in 2014) but would have been higher at 1.8% if not for the continuing weakness in the entertainment category (which has hit quite a few retailers this year).
Kmart’s total sales rose 2.9% to $998 million, up from the 0.,9% seen in the 2014 year.
Target’s same-store sales continued to go backwards, falling 2.3%, which was a lot better than the fall of 5.3% seen in 2013-14.
Top line sales rose 4.6% to $753 million because of the opening of new or revamped stores, which helped explain the difference with the 4.2% fall in 2013-14 when the chain was struggling with poor sales, staffing issues and overstocks.
Wesfarmers’ shares rose 1.3% to $43.92.
