One of the reasons I bought Wesfarmers Limited (ASX: WES) shares many years ago was the unique business model it offered – one that no other ASX 100 share possesses.
That unique offering is the stable of four of the best retail companies in Australia, supplemented by a diverse range of other businesses.
Wesfarmers is essentially a retail company, if we go by the numbers anyway. Its four retailing jewels, Bunnings, Target, Kmart and OfficeWorks, habitually bring home the lion's share of both revenues and earnings.
Over FY2025, for example, Wesfarmers reported total revenues of $45.7 billion. Of that $45.7 billion, its four big retailers contributed $34.45 billion, or over 75%, to that total. Bunnings alone was responsible for $19.56 billion.
The remaining revenues and earnings are generated by Wesfarmers' other divisions, which include WesCEF (Wesfarmers Chemicals, Energy, and Fertilisers), Industrial and Safety, and Wesfarmers Health.
In effect, Wesfarmers can be thought of as a company that owns four of the best retail businesses in Australia, supported by a range of other diversified sources of income.
No other ASX 100 share can match this unique offering. Perhaps the only one that might come close is Premier Investments Ltd (ASX: PMV), owner of Smiggle and Peter Alexander. But Premier is a pure-play retailer, with no supplementary diversification. Plus, it has recently been making moves to downsize its portfolio.
Can the unique offering from Wesfarmers shares last?
The ASX is an ever-changing institution. Plus, conglomerates of Wesfarmers' nature are increasingly rare around the world. The temptation to spin off bits and pieces of companies like Wesfarmers is always there. Wesfarmers itself has done this in the past, most notably with Coles Group Ltd (ASX: COL). Coles was formerly part of Wesfarmers, but was spun out of the company's nest back in 2018.
So how long can Wesfarmers maintain its unique offering to ASX investors?
Well, I have confidence that it will. Wesfarmers is a very old company, having been in operation for over a century. Its managers know what has always worked for the company and its shareholders, and what hasn't. Every move Wesfarmers has made in recent history has benefitted its investors mightily. That ranges from the sale of Coles to the acquisitions of Priceline and Kidman Resources. The latter fortuitously occurred right before the lithium boom.
Wesfarmers shares have returned healthy capital growth and meaningful dividend income for decades. I'm confident that its unique nature among other ASX 100 shares will allow it to continue doing so for many years to come.
