Wesfarmers Ltd (ASX: WES) is Australia's largest retail business, it operates Bunnings, Coles, Target, Kmart and Officeworks.
Every quarter the conglomerate reports its quarterly sales figures, so investors can see how the retail giant is tracking.
Wesfarmers reported that Bunnings Australia & New Zealand grew sales by 8.9% to just over $3 billion. Most of this growth was achieved through strong same store sales growth, which was 7.7% for the quarter. Managing Director Rob Scott attributed this performance to continued focus on delivering increased value and better experiences for customers.
However, investors will likely be disappointed by the Bunnings UK & Ireland result. Sales decreased by 6.5% to $374 million, however it was even worse in local currency terms with total sales down 13.5% and same store sales down 15.4%. Management said that trading results had improved early in the quarter but severe weather in March had significantly affected trading, particularly for outdoor products.
Coles' total sales increased by 0.3% to $9.05 billion. Convenience sales dropped by 8% whilst Food & Liquor increased by 1.9%. Comparable food and liquor sales increased 0.9% and price deflation came in at 0.7% for the quarter.
Coles Managing Director John Durkan said "Continued improvement in customer satisfaction levels was a highlight for the quarter, particularly in the areas of customer service, range and availability, which supported continue growth in customer transactions."
Department store sales increased by 6.2%, within this figure Kmart achieved sales growth of 10.2% whilst Target's sales fell by 2%. Kmart achieved growth in all categories compared to last year by maintaining price leadership as well as improving its product offering, according to Kmart's Managing Director, Ian Bailey.
Finally, Officeworks achieved sales growth of 8.8% to almost $600 million. Officeworks Managing Director Mark Ward said the continuation of strong sales growth across stores and online in a competitive market was very pleasing.
Foolish takeaway
Bunnings ANZ and Kmart continue to impress, their sales growth is very good considering how sluggish the Australian economy is. Wesfarmers will need to work hard turning Bunnings UK&I around before it turns into another Masters.
Overall, I thought this was a decent release by Wesfarmers and I can see why Coles is being ejected from the group – it's unlikely its sales, let alone profit, is going to shoot upwards any time soon.
I wouldn't buy Wesfarmers at the current share price, but if it acquires other businesses with good growth prospects it could become an interesting option.
