Wesfarmers cautious about Q4 trading
Published on Fri, 23/04/2010, 12:09:17
Wesfarmers has announced its retail sales for the third quarter (Q3) of the 2010 financial year. The Coles division reported solid sales growth in the period, while Kmart and Target showed mixed results and lower margins than in the previous corresponding period.
Managing director Richard Goyder said the retail divisions’ sales performance in the Q3 was pleasing overall given the back drop of rising interest rates and the positive impact of the Federal Government’s fiscal stimulus packages on retail sales in the prior corresponding period.
“Progress on strategies across the retail business remains on track,” he said. “Solid volume growth, particularly in the group’s turnaround businesses, continues to show that customers are responding well to improvements in retail offerings.”
The group remains cautious on the outlook for the fourth quarter of the financial year, particularly given the impact of the government’s stimulus on trading in the prior corresponding period.
Total Coles food and liquor sales for Q3 were $5.465 billion, up 3.9 per cent on the prior corresponding period, with comparable food and liquor store sales growth of 3.8 per cent.
Coles managing director Ian McLeod said the solid food and liquor sales result for Q3 was pleasing, despite the level of price deflation, reflecting a continuing positive customer response to the company’s strong focus on quality, service and value.
“As part of our plan to improve supply chain efficiency and store standards we have introduced easy store ordering to 100 stores and, as part of our plan to improve convenience for customers, we have introduced self check-out to stores across the network.”
Four Coles supermarkets were transferred to FoodWorks and four supermarkets were closed as part of the ongoing store consolidation and refurbishments program.
One 1st Choice and one Liquorland store were opened during the quarter, while seven smaller format liquor stores were closed.
Total sales of $725 million for Q3 for were flat for Target compared to the prior corresponding period, while comparable store sales fell by two per cent.
“As anticipated at the half year result briefing, the quarter proved a very difficult one compared to the prior corresponding period that benefited from the Federal Government stimulus,” said Target manager Launa Inman.
Three stores were refurbished in the quarter, one store was closed and no stores were opened.
Total sales of $824 million for Q3 were up by four per cent for Kmart over the prior corresponding period, consistent with comparable store sales growth of four per cent.
Kmart managing director Guy Rosso said Kmart’s sales growth for the quarter was pleasing, given the prior corresponding period included the government stimulus.
“We invited our customers to come into our stores and expect change, we’ve further invested in price and their initial response had been positive,” he said.