- Retail conglomerate giant Wesfarmers (WES) has seen ongoing sales strength in the face of COVID-19 between July and October
- The company has experienced continued significant demand growth in Bunnings, Target, Kmart, Officeworks and Catch
- This follows on from the strong results recorded in the second half of FY20
- Online sales grew 166 per cent, primarily as a result of COVID-19 lockdowns and the forced closure of stores — particularly in metropolitan Melbourne
- Wesfarmers has ended the day 2.54 per cent in the green with shares trading for $48.78 each
Wesfarmers (WES) has seen ongoing sales strength in the face of COVID-19 between July and October.
Even as the retail conglomerate giant faced store closures in Victoria, Wesfarmers has experienced continued significant demand growth in Bunnings, Officeworks and Catch, continuing on from the strong results recorded in the second half of FY20.
Excluding Catch, Wesfarmers experienced a 166 per cent growth in online sales. This was largely driven by Melbourne lockdowns over the past several months; excluding Melbourne figures, online sales grew by 98 per cent.
“Despite the challenging operating environment, the results across the group’s retail businesses reflect their continued focus on meeting the changing needs of customers and delivering greater value, quality and convenience while providing safe and trusted environments for customers to shop,” Managing Director Rob Scott said.
“The trading restrictions in Melbourne were difficult for team members and customers, and it is encouraging to see progress with the reopening of stores over recent weeks,” he added.
Throughout its Bunnings stores, Wesfarmers experienced strong sales growth in both the consumers and commercial segments.
The company credits this to homeowners spending more time undertaking projects around the home.
Excluding its metropolitan Melbourne stores, total sales grew 29.3 per cent.
Kmart and Target
Both Kmart and Target saw continued sales growth in the home, active and kids sectors. However, this was offset by lower demand for apparel products.
The closure of 38 Kmart stores and 32 Target stores in Melbourne impacted sales, but this was partially offset by strong online growth.
Excluding its metropolitan stores, Kmart sales grew 12.1 per cent while Target sales grew 6.7 per cent.
While stock availability impacted Kmart’s sales throughout July and August, progress has been made to improve availability, with stock significantly increasing in preparation for the Christmas trading period.
Wesfarmers also saw some key management changes over the last quarter, with Marina Joanou deciding to step back as her role of Managing Director at Target.
As a result, Richard Pearson was appointed as Managing Director in September. Marina has not left the business entirely but will take some leave before deciding what to do next at Target.
Sales growth in Officeworks was supported by strong demand for technology and home office products as COVID-19 caused people to work from home.
Total sales growth was 27.3 per cent, excluding metropolitan Melbourne stores.
Progress is continuing with online retailer Catch, with strong growth experienced in both its in-stock and marketplace sectors.
Catch had 2.7 million active users at the end of October compared to 2.3 million active users at the end of the 2020 financial year.
Wesfarmers has ended the day 2.54 per cent in the green with shares trading for $48.78 each in a $53.93 billion market cap.