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Coles & Bunnings Australia Lift Wesfarmers Ltd Sales

This morning, retail heavyweight Wesfarmers Ltd (ASX: WES) released its third-quarter sales report to ASX investors. 

This morning, retail heavyweight Wesfarmers Ltd (ASX: WES) released its third-quarter sales report to ASX investors.

Wesfarmers is the owner of popular retail brands in Australia and New Zealand, including Coles, Bunnings Warehouse, Kmart, Target and Officeworks.

For the first nine months of its current financial year, Wesfarmers reported a 2.4% increase in sales, compared to the same period from last year.

Bunnings ANZ Good, UK Has Work To Do

In Australia and New Zealand, Bunnings, the home improvement business, notched up an impressive 9.6% increase in sales, compared to the same period last year. Wesfarmers noted the result was pleasing, albeit in a market of favourable conditions.

“We remain focused on delivering on all parts of our strategic agenda, with particular focus on providing greater value and better experiences to customers,” Bunnings Managing Director Michael Schneider said.

In the UK and Ireland, a market which Wesfarmers recently expanded into via the takeover of Homebase, Bunnings reported a 12.9% fall in sales.

“Retail execution standards lifted in Homebase in preparation for spring and stores are well-positioned for the arrival of the season,” Schneider said, noting that work needs to be done. “Refinement of the Bunnings format is ongoing with recent conversions reflecting updated range plans.”

At the reporting date, the number of Bunnings-branded stores stood at 23, with an additional 227 Homebase stores yet to be changed.

Coles

“Sales momentum in Coles continued to improve during the quarter, with headline food and liquor sales growth of 1.9 per cent, as the business remained focused on providing customers with the best possible value, service and quality,” Wesfarmers’ Managing Director Rob Scott said.

For the three quarters, sales rose just 0.3% with sales in the convenience channel weighing on performance.

“Continued improvement in customer satisfaction levels was a highlight for the quarter, particularly in the areas of customer service, range and availability, which supported continued growth in customer transactions,” Scott said.

Kmart again bolstered sales in its department stores with Target’s sales performance again coming in lower over the prior period. For some time, the performance of Target has lagged Kmart and called into question its position as ‘mid-range’ department store.

During the period one Target store was closed and rebranded as Kmart.

Investors React

Following today’s announcement Wesfarmers shares closed 0.6% higher. Meanwhile, shares of rival Woolworths Group Ltd (ASX: WOW) pushed 1.4% into the green.

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