A solid March quarter sales update from Wesfarmers’ (WES) retailing business – except for the Target department store chain which continues to lose ground.
The sales figures were dominated by another strong performance from hardware giant Bunnings which is easy to understand given the home building and renovation boom currently underway.
Wesfarmers says it was pleased with the sales performance, with supermarket chain Coles meeting expectations with its third quarter sales. CEO Richard Goyder said the retail results were “pleasing”.
"The focus of our retail businesses to provide increased value to customers through ongoing reinvestment of productivity improvements into lower prices and better service continued during the quarter," he said.
WES vs WOW 1Y – Wesfarmers result ‘pleasing’, Woolies to report May 6
Coles reported 3.8% growth in same-store food and liquor sales in the three months to 31 March 2015. While that was its weakest growth for a year, price deflation in fruit and veg and petrol had a big impact.
Coles topline food and liquor sales grew 5.4% to $7.1 billion in the quarter, thanks to four new supermarkets opening in the quarter.
Analysts said the move by Coles to ‘everyday low prices” (Every Day Value) seems to be paying off (that means low prices on as many products as possible rather than huge one off discounts).
Bunnings same-store growth was 9.4%, while sales at Target declined by 1.9% on a same-store basis.
Bunnings total sales jumped 12% to $2.3 billion as the four new Warehouse stores and one smaller format store were opened. Another 21 stores are under construction.
Kmart again did well, with same-store sales growth accelerating to 6.3% or 5.5% adjusted for Easter.
Kmart sales were up nearly 11% in the quarter on a topline basis as it opened 10 new stores and five Kmart Tyre outlets in the quarter.
But Targets’s sales continued to drop, falling 1.9% (on a same store basis) in the quarter or 3.2% adjusted for Easter. Target’s sales fell 1.6% in the quarter on a top line basis
Officeworks saw a 9% rise in topline sales in the quarter to $485 million (same store sales data was not given by Coles or Wesfarmers yesterday). Five new stores were opened in the quarter.
Wesfarmers shares fell 0.3% to $43 on the news.
