The Wesfarmers Ltd (ASX: WES) share price opened at $49.75 today, up 0.2%.
Wesfarmers shares moved sideways during July, up 0.63% to $49.65 apiece at the close of yesterday's session.
The Wesfarmers share price is up 8.4% in 2023 so far, as seen in the chart below.
This is despite the threat of high inflation and interest rates, which are expected to eventually lead to a meaningful reduction in customer spending across the economy.
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Wesfarmers share price up in 2023 but lags the retail index
Wesfarmers is a $52 billion conglomerate and the largest retail share in the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ).
The index is up 11.6% in 2023, with the impact of higher interest rates yet to fully play out in retail due to the lag effect. This means the Wesfarmers share price is actually underperforming the index.
The company's iconic retail brands include its flagship retail business, Bunnings — which contributes about 60% of total earnings — along with Kmart, Target, Officeworks, Priceline, and catch.com.au.
We'll find out this month how Wesfarmers is faring in today's inflationary economy with the company due to release its full-year FY23 results on 25 August.
Earnings season officially begins today.
What's the latest news from Wesfarmers?
According to The Australian, Wesfarmers is stripping out eight regional manager jobs at Bunnings to cut costs.
After years of investment in technology and productivity programs, Bunnings thinks this level of management is now unnecessary.
Bunnings managing director Mike Schneider said:
This supports our low-cost operator model, ensures a stronger voice for our team, simplifies communication and enhances execution across our network.
Post pandemic, this design will help enable deeper engagement with our store teams and in turn a more consistent customer offer.
The managers affected have been offered other positions within the company.
This follows news last week that Wesfarmers is combining its Target and Kmart business segments, also to increase efficiency and productivity.
Wesfarmers will keep the two brands but inject Kmart merchandise planning tools and inventory scanning technologies into Target.
The move will entail a small number of redundancies but create more jobs in the long term, according to management.
What's going on with retail sales?
Figures released by the Australian Bureau of Statistics (ABS) last week revealed retail turnover fell 0.8% in June. This followed an 0.8% increase in May and an 0.1% fall in April.
ABS head of retail statistics Ben Dorber said:
Retail turnover fell sharply in June due to weaker than usual spending on end of financial year sales. This comes as cost-of-living pressures continued to weigh on consumer spending.
