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Wesfarmers Limited has released its second quarter retail sales results for the period ending 31 December 2012.
Managing director Richard Goyder said he was generally pleased with the sales results, in particular the solid performance of Coles, Bunnings and Kmart.
“The retail businesses continue to improve their customer offers, with record numbers of shoppers visiting our stores during the Christmas period,” Mr Goyder said.
“Coles’ comparable food and liquor sales growth of 3.8 per cent for the half was reflective of the ongoing improvement in the quality, service and value of the customer offer. The December quarter represented the fifteenth consecutive quarter of growth in comparable sales and sales density.
“Bunnings’ store sales increased 6.0 per cent for the half, with comparable store sales growing 3.4 per cent. Good transaction growth in consumer and commercial areas, despite generally soft housing market conditions, is reflective of the strength of the Bunnings business.
“Officeworks continued to see solid growth in online sales, however, sales overall were flat due to ongoing deflation in technology related categories and continued challenging conditions for its small to medium sized business customers.
“Kmart’s total sales increased 3.5 per cent for the half, with comparable sales growing 3.0 per cent. This improving sales trend, supported by strong growth in transactions and units, reflects Kmart’s investment in low prices on everyday items.
“Target recorded total sales growth of 1.2 per cent during the half, while comparable sales were 1.8 per cent below last year. Target’s organisational capability was improved during the half with encouraging sales results recorded in a number of categories. Sales in electrical and entertainment categories remained challenging.”
COLES
Food and Liquor
Headline food and liquor sales for the second quarter1 of the 2013 financial year were
$7.7 billion, up 5.0 per cent on the previous corresponding period. Headline sales in the first half8 of the 2013 financial year increased by 5.0 per cent to $14.3 billion.
Comparable food and liquor store sales increased by 3.9 per cent in the second quarter1 and 3.8 per cent in the first half8. Food and liquor price deflation moderated to 0.9 per cent for the second quarter reflecting lower fresh produce deflation. Coles continued to invest in lower prices throughout the quarter, driving volume growth ahead of sales growth. Food and liquor price deflation in the first half was two per cent.
Coles opened 10 new supermarkets and closed four stores during the quarter, taking the total number of stores to 753. Coles also refurbished a further 26 stores in the renewal format during the quarter, taking the total number of renewal stores to 301. Coles opened 20 new liquor stores and one hotel and closed five liquor stores during the quarter, taking the total number of liquor stores and hotels to 895.
Fuel volumes increased 4.4 per cent for the quarter and 3.2 per cent in the first half. Comparable fuel volumes increased 3.4 per cent in the second quarter1 and 2.0 per cent in the first half, reflecting increasing supermarket customer numbers and a strong customer response to fuel promotional campaigns in the half.
Convenience store sales, excluding fuel sales, increased 0.3 per cent for the quarter1 and 0.1 per cent in the first half. Comparable store sales declined 1.7 per cent in the second quarter1 and 2.2 per cent in the first half.
Coles Express opened five new sites and closed one site during the second quarter, bringing the total store network to 634 sites.
Bunnings
Total sales for the quarter4 of $2.2 billion were 6.6 per cent above the previous corresponding period. Total store sales for the quarter4 grew 6.8 per cent, while store-on-store growth was 4.2 per cent.
For the first half of the 2013 financial year total sales increased 5.7 per cent to $4.0 billion. Total store sales grew 6.0 per cent in the first half9, while store-on-store growth was 3.4 per cent. The sales performance reflects continued strong levels of customer participation.
During the quarter, nine trading locations were opened, including four Bunnings Warehouses, two smaller format Bunnings stores and three trade centres. A further 11 sites were under construction at the end of December.
Officeworks
Total sales for the quarter4 were $350 million, up 0.3 per cent on the previous corresponding period. Good growth in transactions resulted in strong online sales growth for the quarter while store sales were 0.1 per cent above the previous corresponding period.
For the first half of the 2013 financial year, total sales increased 0.3 per cent to $712 million. Transaction growth for the half was strong and growth in online sales exceeded 10 per cent. Total store sales for the half were 0.1 per cent below the previous corresponding period.
During the quarter, four new Officeworks stores were opened.
Kmart
Total sales of $1.4 billion for the quarter1 were 3.8 per cent above the previous corresponding period, with comparable store sales increasing 3.7 per cent. This represented the twelfth consecutive quarter of growth in transactions and units sold.
For the first half of the 2013 financial year total sales increased 3.5 per cent to $2.4 billion, with comparable store sales increasing 3.0 per cent.
During the second quarter, Kmart opened four new stores, resulting in six new store openings during the first half. Three store refurbishments were completed during the quarter.
Target
Total sales of $1.3 billion for the quarter were 0.6 per cent above the previous corresponding period, with comparable store sales 0.2 per cent below last year.
For the first half, total sales increased 1.2 per cent to $2.1 billion, with comparable store sales declining 1.8 per cent. The sales performance of electrical and entertainment categories continued to be challenging. Reported comparable store sales growth was also significantly affected by the decision to bring forward the timing of the mid-year toy sale into June 2012 and the continued focus on promotional effectiveness.
During the quarter, Target opened four new stores and two replacement stores.
