Wesfarmers has come out on top for the tenth quarter straight over rival Woolworths, who had released its half-year results on Tuesday, boasting Coles delivered a “record-breaking” Christmas.
Coles saw total half-year sales increase by 7.3 per cent to $17.5 billion while second quarter sales grew was $9.4 billion, growing 6.7 per cent from the previous corresponding period.
Coles also reported food and liquor sales of $7.3 billion, up 4.3 per cent. The company highlighted that volume growth exceeds sales growth as deflation in fresh produce and continued investment in value led food and liquor deflation increased to 2.4 per cent in the second quarter. Deflation for the quarter reflected an increase from deflation of 1.8 per cent in the first quarter, resulting in deflation of 2.1 per cent in the first half.
Coles managing director Ian Mcleod said the business has made good progress as customers continue to be rewarded for its continued investment in lower prices as part of its ‘Down Down’ campaign.
“As we continue the transformation program, we are encouraged that our drive to change the business has resonated well with customers and is reflected in improvements in perception and increasing customer numbers,” he said.
Price deflation continued to present challenges for Wesfarmers' home improvement and office supplies category but each division managed to pull through positively.
Its home improvement and office supplies division sales were up 4.8 per cent to $2.4 billion for the second quarter, with much of the growth being contributed to by Bunnings’ total store sales growing 5.5 per cent.
While total sales for office supplies categories were up 0.9 per cent to $349 million for the quarter where it saw retail sales across its Officeworks store network grew by 0.2 per cent, which was underpinned by continued strong transaction growth.
Target saw total sales of $1.3 billion for the quarter were 3.1 per cent below the corresponding period and for the first half total sales declined 2.5 per cent to $2.1 billion.
Target managing director Dene Rogers blames difficult trading conditions for the negative impact but reassures that while customer numbers were down across the quarter, there was a noticeable improvement in December as the business took steps to improve its promotional effectiveness.
Similarly, Kmart’s total sales of $1.4 billion for the quarter were 2.2 per cent below the previous corresponding period while deflation in the first half saw total sales decline of 1.3 per cent to $2.3 billion.
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