By Aimee Chanthadavong
Wesfarmers reported overall strong retail sales results for the first quarter of the 2014 financial year with good performances delivered by Coles, Bunnings, Officeworks and Kmart.
“Our continued focus on improving merchandise offers and value for customers was reflected in strong transaction and volume growth achieved across our retail businesses,” managing director Richard Goyder said.
The biggest store sales growth was delivered by the company’s home and improvement brand Bunnings, which recorded a 10.3 per cent growth to $1.9 billion from the $1.8 billion value that was recorded during the same period last year. Store-on-store sales grew 7.1 per cent.
“Bunnings achieved good growth in both consumer and commercial areas as customers continue to respond well to our strategic initiatives which are creating more value and better customer experiences,” Goyder said.
Its supermarket arm, Coles, however continued to be the main leverage for the group, reporting food and sales growth for the quarter up 4.4 per cent to $6.9 billion. Its food and liquor however did experience a price deflation of 2.5 per cent during the quarter, as a result of significant fresh produce deflation and its continued investment in its lower prices campaign.
Coles’ managing director Ian McLeod said Coles had continued to improve its store network through its store renewal program that will see format and category innovations, such as increasing focus on fresh produce, bakery and freshly prepared hot and cold take away meals.
Officeworks also maintained a steady growth with total sales increasing by 3 per cent for the quarter.
Similarly, Kmart’s total sales for the quarter were 4.6 per cent above last year, with comparable sales increasing 2 per cent when adjusted for the effect of the Toy Sale change.
Kmart managing director Guy Russo said sales for the quarter were pleasing, with strong sales growth achieved across apparel and home categories. Within the apparel category, performance was particularly strong across childrenswear, underwear and sleepwear. Sales in maturing categories such as video games, music and DVDs continued to decline during the quarter.
“The quarter represented the fifteenth consecutive quarter of growth in transactions and units sold, and reflects Kmart’s continued focus on delivering low prices to families on everyday items,” he said.
On the other hand, as predicted, Target’s retail sales for the quarter performance was below last year, declining 6.1 per cent to $789 million.
Target managing director Stuart Machin said that, as previously outlined, trading for the first quarter had been challenging, reflecting the continued clearance of excess winter inventory which delayed the launch of the spring/summer range.
“Sales were significantly affected by high levels of clearance activity and the non-repeat of the promotional activity of the prior corresponding period,” he said.
“As a result of this clearance activity winter inventories declined significantly during the quarter. Positively, where improvements have been made to ranges and price architectures, customers have responded favourably to the enhanced offers.”
However, the company has been looking bolster Target’s womenswear department with speculations the company will be hiring British Marks & Spencer executive Gillian Ridley Whittle.
As for how Christmas will be looking? Goyder said the company is “well placed” for the important trading period with its “strong merchandise offers and better value”.