Once again, Coles continues to drive Wesfarmers growth with the company reporting a 9.3 per cent increase in first half earnings to $1.29 billion.

Coles reported a strong result with earnings up 15.1 per cent to $755 million, which was three time the rate of sales over the same period. The results continue to improve due to increasing customer transactions, influenced by its ‘Down Down’ and ‘Super Specials’ campaigns. Coles also achieved its most successful Christmas performance on record, with 21 million customer transactions and almost $1 billion in sales across the division in the week leading up to Christmas.

Bunnings, Officeworks and Kmart also reported  solid first half earnings of $518 million, $38 million and $246 million respectively .

However, Target was the main drag for the company. It recorded earnings of $148 million for the half, 20.4 per cent below earnings of $186 million achieved in the prior corresponding period. Despite continued deflation in electrical and entertainment categories, improved sales momentum was achieved during the half as customers responded positively to a number of new merchandise initiatives, an increased focus on better sourcing and greater promotional effectiveness.

Managing director Richard Goyder said he was pleased with the 9.3 per cent increase in the Group’s profit.

“Continued improvements in the customer offers of our retail businesses contributed strongly to the increased earnings recorded by the Group. The earnings growth achieved at Coles and Kmart was pleasing, reflecting the ongoing turnaround of these businesses and a strong customer response to their improving offers,” he said.

Looking ahead, Goyder said he was cautiously optimistic for the Group’s second half outlook, despite continuing economic and market uncertainty expected to give rise to continued challenging conditions in the Resources and Industrial and Safety divisions.

“We expect growth from the Group’s retail businesses as we further improve customer offers and operating efficiencies, and strengthen all of our channels to market,” he said.