Wesfarmers says first-quarter retail sales were ‘generally pleasing’

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Coles’ headline food and liquor sales for the quarter increased by 1.5 per cent to $7,968 million, as the business continued to invest across all elements of the customer offer.

The company says sales growth was achieved despite significant fresh-produce deflation during the period, and the business continued to see improvements in key metrics such as transaction growth, unit growth, fresh participation and customer satisfaction.

Coles Managing Director John Durkan says that, excluding the impact of the significant fresh-produce deflation, food and liquor comparable sales in the first quarter were broadly in line with the trend achieved in the 2017 financial year.

“As we outlined at our full-year update in August, we continue to invest in value, quality, availability and service for our customers,” he said. “This underpinned continued improvements in transaction growth, unit growth and customer satisfaction in the quarter. We believe our focus on a customer-led strategy will ensure Coles maintains its strong market position in a highly competitive market, and will deliver sustainable long-term growth.”

Mr Durkan also outlined opportunities for growth in the business.

“We continue to focus on increasing our penetration in fresh, improving our store network, investing in new routes to market, and simplifying our business in terms of range and our cost of doing business,” he said.

“The liquor business continued to build on its positive sales momentum, largely led by Liquorland. The transformation to date has seen a focus on improving price competitiveness, range and the quality of the store network. Further opportunities remain as we continue to enhance our offering to customers through product innovation, exclusive brands, new channels and improved service.”

Coles continued to improve and optimise its store network, opening one supermarket and closing four during the quarter, resulting in a total of 798 supermarkets at the end of the period.

Total Coles Express sales, including fuel, for the quarter were $1,402 million, a decrease of 9.5 per cent on the prior corresponding period, largely driven by lower fuel volumes.

Coles Express continued to expand its network during the quarter, opening five new sites and closing one site, bringing the total network to 706 sites.

Wesfarmers also reported strong performance in other areas of its retail business: Bunnings Australia and New Zealand (total sales growth of 11.5 per cent), Kmart (total sales growth of nine per cent) and Officeworks (total sales increased 7.8 per cent).