Wesfarmers’ Coles first quarter sales up 4pc

Mitchell Neems
OCTOBER 30, 2014
BUSINESS SPECTATOR
WESFARMERS’ Coles has delivered a 4 per cent jump in first-quarter sales, buoyed by the strong performance of the food and liquor business.
In the three months to September 30, Coles total sales increased to $9.25 billion, from $8.89 in the previous corresponding quarter.
Food and liquor sales rose 5.8 per cent to $7.303bn, offsetting a 2.3 per cent decline in convenience sales to $1.95bn.
Coles recorded comparable food and liquor store sales growth of 4.3 per cent in the quarter. Excluding liquor, comparable food store sales increased 5 per cent.
Wesfarmers (WES) home improvement and office supplies operations — which includes Bunnings and Officeworks — saw first-quarter sales lift 10.5 per cent to $2.62bn, from $2.37bn.
Separately, Bunnings recorded total sales growth of 11 per cent to $2.2bn in the quarter.
Officeworks recorded total sales for the quarter of $403m, an 8 per cent increase on the previous corresponding period.
Managing director Richard Goyder said the first-quarter results were generally pleasing.
“During the quarter our retail portfolio continued to invest productivity improvements into lower pricing, enhance merchandise offers and customer service, as well as improve its store networks,” Mr Goyder said.
Mr Goyder said Coles food and liquor sales growth reflected improvements in all key metrics including customer transactions, basket size and fresh participation.
Wesfarmers says tobacco excise increases and fresh food price rises due to tougher growing conditions partially offset gains from easing food and liquor price deflation.
However, Target continued to weigh on Wesfarmers’ retail operations, delivering total sales in the quarter of $753m, a 4.6 per cent decline on the previous corresponding period.