Free Subscription

  • Access 15 free news articles each month


Try one month for $5
  • Unlimited access to news,insights and opinions
  • Quarterly and weekly magazines
  • Independent research reports and forecasts
  • Quarterly webinars with industry experts
  • Q&A with retail leaders
  • Career advice
  • Exclusive Masterclass access. Part of Retail Week 2021

Slowing Kmart sales to weigh on Wesfarmers

In a post-Christmas trading update on Monday, Wesfarmers revealed that Kmart’s total sales (excluding Kmart Tyre and Auto Services) rose just 1 per cent sales in the first half of FY19, and comparable sales dropped 0.6 per cent.

The performance was atypical for the department store, which has recorded five years of gains under the leadership of turnaround guru Guy Russo, though Wesfarmers boss Rob Scott alluded to problems at the company’s annual general meeting in November.

In a statement to the ASX, Wesfarmers said sales were impacted by its exit from the low-margin DVD category, as well as weak demand in apparel categories, particularly womenswear, and moderate growth in everyday products compared to the previous year.

Citi research recently posited that Kmart’s 19-quarter run of like-for-like sales growth had likely come to an end, with Target and Big W to deliver positive sales in the low single digits.

Despite this, Wesfarmers is expecting to post earnings before interest and tax of between $385 million and $400 million at its half year results, to be revealed on February 21, not including the $265 million to $275 million gain on the disposal of Kmart Tyre and Auto finalised earlier in the year.

The conglomerate’s other department store business, Target, saw total sales increase by 0.2 per cent and comparable sales increase by 0.5 per cent – an improvement on the prior corresponding period.

Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.

You have 7 free articles.

Masterclasses are for professionals only

Only $5 p/m for first 3 months
Become a Professional Already a professional? Login
  • Daily exclusive Members Only content straight to your inbox
  • Access to exclusive Retail Week events including all 4 Masterclasses 28 February - 3 March
  • Retail insights and intelligence
  • On-demand videos with industry professionals
  • Weekly careers advice specific to retailers
  • Independent research reports and forecasts
  • Q&A with industry experts
  • Content, content, content! Weekly and quarterly magazines