By Claire Reilly
Wesfarmers – the parent company of Bunnings, Officeworks, Target, Kmart and Coles – announced its third quarter retail sales results today, reporting modest growth in all its main businesses, aside from Target.
Compared to third quarter sales figures from 2011, the company’s Home Improvement sector was up 4.3 per cent to $1.74 billion, the Office Supplies business was up 2.5 per cent to $415 million, Kmart was up 1.2 per cent to $813 million, and Target sales were down 4.4 per cent from $724 million to $692 million.
Wesfarmers managing director, Richard Goyder, said he was happy with the company’s overall results, especially considering the tight retail market in Australia. He also noted that the entertainment category was one of the main contributing factors towards Target’s poor performance.
“Target’s sales during the quarter continued to be negatively affected by tough trading conditions, particularly in entertainment categories,” said Goyder.
“Sales growth was also negatively affected by a comparatively lower level of clearance activity, following good stock management in the previous quarter, and a focus on improving the promotional program. These changes have resulted in notable margin improvement.”
Mr Goyder also provided background of Wesfarmers’ other key businesses.
“Bunnings’ store sales increased 4.7 per cent in the quarter with sales growth achieved in both consumer and commercial areas,” he said. “The result reflects a continued positive response from customers to improvements in the offer as well as strong growth in the store network.
According to Goyder, Officeworks' growth was “underpinned by growing customer numbers and a pleasing performance during the important back-to-school and back-to-work periods,” while Kmart sales increased “as customers continued to respond favourably to the investment in lowering prices on everyday items, as evidenced by another quarter of growth in customer numbers and units sold".
At 31 March 2012, the company had a total of 294 Bunnings stores (including warehouses, trade centres and smaller format stores), 138 Officeworks stores, 2 Harris Technology stores, 301 Target and Target Country stores, and 186 Kmart stores (not including Kmart Tyre & Auto shopfronts).