Coles Myer first half sales up
Australian retailer drives brands forward
February 14 2003
Coles Myer saw first half sales increase by 5.5 per cent to A$13.8bn in the 26 weeks to January 26, with second quarter sales up 4.1 per cent to A$7.5bn.
The food & liquor division of the Australian retailer delivered a sales increase of 5.3 per cent over the half in an intensely competitive environment, while Kmart and Officeworks combined sales rose by 9.5 per cent and Target sales by 8.6 per cent.
Chief operating officer food and liquor Alan Williams said the group was on track to deliver double-digit profit growth for the half, in line with strategy. “Despite our strong competitive and value position, food sales have been impacted by fuel discounts. In addition, price deflation has slowed sales in the liquor market, and lower inflation has impacted other areas, particularly fresh produce. However, our continuing focus on shrinkage, waste and other initiatives has underpinned and enabled strong growth in our bottom line.”
Mr Williams said that while the development of a fuel offer to sell petrol at selected sites is Cole Meyer’s highest priority, the food & liquor group has initiated other initiatives including an improved fresh produce offer, competitive pricing and an expanded value-positioned own brand range.
Williams said: “The supermarket store expansion program is continuing, with 17 new stores opened during the half, in addition to 6 acquisitions. A further 21 openings are expected over the year.”
Kmart & Officeworks saw combined sales increase by 9.5 per cent over the half. Kmart MD Hani Zayadi said: “The Kmart result reflected growing customer acceptance of our strategic direction, underpinned by our lowest price guarantee. Customers are responding positively to our renewed focus on meeting their needs, which sees us delivering in-store range enhancements, improved service, wider aisles and faster checkouts.
“Our more effective marketing campaign, ‘cutting the cost of living’, has achieved strong results. The focus on item and price is continuing and has been well received. Sales in all apparel areas as well as entertainment and consumables were particularly strong, with better in stock performance and merchandise offer.”
Officeworks MD Peter Scott said the store rollout strategy was proceeding to plan, with three new stores opened and a further seven openings expected in the second half. Myer Grace Bros and Megamart combined sales were slightly lower over the half down 1.3 per cent.
Grace Bros MD Dawn Robertson said: “In a very competitive and promotional market, our first Christmas under the turnaround strategy was satisfactory. Good customer traffic was experienced over the holiday period, with customers responding to our strengthening brand positioning and strategic marketing events.
“Further enhancements to branded product ranges in our key focus areas of womenswear, menswear, cosmetics and home will continue through 2003, along withongoing improvements in service quality and in-store environments. Our new marketing program launches this weekend, and our new private label brands, Basque and Urbane, have already been well received by customers. Importantly, our bottom line is reflecting margin improvement, due to better planning and execution resulting in higher stock turn.”
