Over 98.9 per cent of Wesfarmers shareholders have formally voted in favour of the proposed Coles demerger at the company’s annual general meeting (AGM) in Perth on Thursday.

Under the plan, the supermarket will be spun off into a separate entity and will begin trading on the ASX on a deferred settlement basis from November 21.

Wesfarmers chairman Michael Chaney has noted that while it is not typical for a parent company to retain a stake in the demerged entity, the Coles demerger is anything but typical.

“I remind you that this will be Australia’s biggest demerger, and it is not a demerger of non-core assets,” Chaney told shareholders on Thursday.

“We believe Coles is a great business and we will join shareholders in having ‘skin in the game’ in its future success.”

Moving forward, Wesfarmers will retain a 15 per cent stake in Coles and a 50 per cent stake in the supermarket’s Flybuys reward platform.

Coles’ new chief executive Steven Cain has shared some insights into the demerged supermarket’s strategy going forward, saying the business will focus on delivering a strong Christmas, before identifying what areas need to be accelerated over the next year.

Cain has also hinted at a bigger focus on convenience moving forward, as well as continuing efforts to keep prices low.

Cain credited Coles’ leadership with steering the supermarket through a volatile food retailing landscape over the last 10 years, in which the company’s profit has doubled and its market share has increased.

Wesfarmers chief executive Rob Scott added that the demerger is a “very big transaction” for the group, noting that Wesfarmers would be fundamentally changed as a result.

However, as Scott said, sometimes getting smaller allows you to grow faster.

“We’re very much focused on what Wesfarmers wants to be over the next decade,” Scott said.

This does not necessarily mean further acquisitions.

“Sometimes the best investment you can make is to not invest,” he said.

Scott said the business will only undertake a merger or acquisition if it is in the interest of Wesfarmers shareholders.

Earlier in the day, Wesfarmers’ Scott opened the AGM by noting that the group holds a positive long-term outlook.

According to Scott, Coles’ recent sales growth was due to the success of the Little Shop campaign, though sales look broadly in line with fourth quarter FY18 post-campaign.

Coles’ online sales have seen strong growth and are expected to reach $1 billion in FY19.

“Coles is a mature, cash-generative business which will provide shareholders with returns that are expected to be resilient through economic cycles,” Scott said.

“It’s being demerged with a strong balance sheet, and the capacity to invest for the future.”

Scott said that Wesfarmers’ businesses post-demerger are world-class business with clear strategies for the future.

Hardware chain Bunnings has seen sales impacted by heavy rainfall, while Kmart has seen sales growth moderate, especially in the apparel category, with the exit of the DVD and CD categories having impacted the business’s sales.

Officeworks has seen new categories such as art supplies bring in new customers.

On the topic of the proposed Remuneration Report, Wesfarmers’ Chaney noted that executive pay levels are an “issue that will take quite some time to moderate.”

By not paying executives competitively, Chaney notes, Wesfarmers would run the risk of losing people to other companies, which would dilute the talent pool available to the business.

In response to a shareholder question, Chaney noted that shareholders wouldn’t see decreased dividends as a result of the Coles demerger.

“Our expectation is that the two [Wesfarmers and Coles] will add up to what the old one would have been,” Chaney said, though he added that as the two businesses diverge this could change.