Wesfarmers has announced its third quarter retail sales results, with total Coles Express sales, including fuel, $1.4 billion, a decrease of 8.9 per cent on the prior corresponding period as lower fuel prices and volumes offset continued growth in convenience store sales.
Total Coles Express sales for the financial year to date decreased 8.5 per cent to $5.1 billion. For the quarter, headline fuel volumes decreased 6.3 per cent and comparable fuel volumes decreased 10.1 per cent. For the financial year to date, headline fuel volumes decreased 2.4 per cent and comparable fuel volumes decreased 5.8 per cent.
As evident in the first half, weighing on fuel volumes were headwinds from competitor site openings and disruption to the network, caused by regulatory and environmental compliance works. In addition, during the quarter, there was an increased focus by competitors on their fuel offer in order to drive footfall into stores.
Convenience store sales increased 12.9 per cent for the quarter and 8.1 per cent on a comparable store basis. For the financial year to date, convenience store sales were up 12.0 per cent and up 8.0 per cent on a comparable store basis.
Coles Express continued to expand its network during the quarter, opening six new sites to bring the total store network to 687 sites.
Food and liquor
Headline food and liquor sales for the quarter were $7.5 billion, up 5.9 per cent on the previous corresponding period. Food and liquor sales for the financial year to date increased 5.6 per cent to $24.2 billion.
Comparable food and liquor store sales increased 4.9 per cent and comparable food store sales increased 4.9 per cent for the quarter.
For the financial year to date, comparable food and liquor store sales increased 4.5 per cent and comparable food store sales increased 4.8 per cent.
Adjusting for the earlier timing of Easter in the 2016 financial year compared to last year, comparable food and liquor store sales and comparable food store sales for the quarter increased 4.4 per cent and 4.5 per cent respectively.
Food and liquor price deflation was 2 per cent during the quarter, bringing food and liquor price deflation to 1.4 per cent for the financial year to date.
Every category recorded deflation throughout the quarter, with the exception of meat and tobacco where inflationary pressures continued.
Coles managing director, John Durkan, said the continued positive momentum in sales was reflective of an unwavering commitment to deliver trusted value to customers through lower prices, while providing market-leading customer service and an exceptional fresh food experience.
“Our customers are our principal focus,” Mr Durkan said.
“Our continued delivery on ‘Every Day’ value is highlighted by price drops on products important to the family basket, such as roast chicken, Colgate toothpaste and Kleenex tissues. This ongoing commitment to customers has delivered continued sales growth through the quarter and culminated in more customers shopping with us over the Easter period.”
Coles continued to improve and optimise its store network during the quarter, opening four supermarkets and closing three, resulting in a total of 783 supermarkets at the end of the quarter. Through the quarter, four supermarkets were renewed, taking the number of renewals for the financial year to date to 26.
Bunnings achieved total sales growth of 11 per cent, while Officeworks’ sales grew 5.6 per cent. Department stores’ sales increased by 11.4 per cent during the quarter, with strong sales growth in Kmart more than offsetting difficult trading in Target.
Kmart sales increased by 17.9 per cent on last year, and growth recorded in all categories. While Target’s sales increased by 2.3 per cent on last year, trading momentum weakened during the quarter, with margins significantly affected by high levels of clearance activity late in the period.