By Shivaun Hales

Wesfarmers results released today indicated declining sales at Target and Kmart due to ongoing price deflation, while new store openings at Bunnings helped lift sales by 5.5% in the quarter.

Wesfarmers managing director Richard Goyder said he was pleased with the group's overall sales result, given the difficult retail environment and widespread deflation. 



"Our retail businesses continue to work hard to execute strategies that are improving the value and shopping experience of their customers," said Goyder. 

Total Target sales for the quarter fell 3.1% below the previous corresponding period to $1.3 billion, while Kmart sales dropped 2.2% to $1.4 billion.

Target’s new managing director, Dene Rogers said total sales had been impacted by tough trading conditions across the market.

“Having joined Target just prior to the important Christmas trading period, I am pleased with the initial customer response to the changes made to our marketing program,” he said.

Target turns focus to inventory management

“We also increased our focus on inventory management to ensure that stock on hand is appropriate as we approach the change in season,” he said.

Despite the sales fall at Kmart, managing director Guy Russo said the retailer experienced growth in unit sales and customer numbers.

“During the period the business continued to improve its in-store offer and provided customers with even greater every day value, while better product sourcing, pricing disciplines and stock management continued to benefit the business,” said Russo.

Bunnings defies retail conditions

Total Home improvement sales for the quarter increased 5.5% to $2.1 million. Bunnings managing director John Gillam said the sales growth was positive given the ongoing deflation and challenging trading conditions.

Two Bunnings stores opened during the second quarter, and 16 are currently under construction, with ten expected to open before the end of this financial year.

Officeworks sales for the quarter were flat, edging up just 0.9% to $349 million as the retailer battled heavy price deflation in the technology and furniture sectors.