Wesfarmers, the owner of Kmart, Bunnings, Officeworks, online marketplace Catch, and Target has reported a 60 per cent growth in online sales to $2.1 billion this year, reflecting continued shifts in customer shopping preferences to digital, click and collect and contactless options for retail products.
Wesfarmers has released its 2020 financial year results and reported a profit after tax of $1.69 billion for the year ending June 30, 2020.
The group’s retail businesses saw a strong growth in online sales of 60 per cent for the year to $1.5 billion, or $2.1 billion including online marketplace, Catch of the day. Wesfarmers credited its online sales increase to “customer shopping preferences and enhanced digital offers”.
Bunnings and Officeworks were the top performers for the group, due to increased demand for products as customers spent more time working, learning and doing projects at home.
Officeworks earning were up 13.8 per cent to $190 million. The Australian office products supplier also saw a 20.4 per cent increase in revenue to $2,787 million, thanks to growth in sales both online and in store during the second half of the financial year when consumer demand for home office supplies surged.
Home improvement store, Bunnings, total earnings also increased 13.9 per cent to $1.85 billion with the company’s revenue also up 13.9 per cent to $14.9 billion. Like Officeworks, the DIY company was popular during the second half of the financial year amongst consumers who have spent more time working and doing projects at home during the ongoing pandemic.
Wesfarmers Managing Director Rob Scott said in a statement on Thursday 20 August that earnings in Bunnings and Officeworks were particularly strong and demonstrated the ability of these businesses to rapidly adapt to the changing needs of their customers.
Kmart Group, which includes Target, Kmart and Catch has a 7.2 per cent increase in revenue to $9.2 billion.
Catch experienced growth across its online marketplace offerings, however target was impacted by lower sales resulting in the Kmart group reporting an earning loss of $222 million.
“On 22 May 2020, a number of actions were announced to accelerate the growth of Kmart and address the unsustainable financial performance of Target,” Rob said in a statement.
These actions included the conversion of suitable Target and Target Country stores to Kmart stores, the closure of a number of Target stores, and a significant restructuring of the Target store support office.
“Good progress has been made on executing these actions, with the agreement of satisfactory commercial terms to convert 24 large format Target stores to Kmart stores, conversion of three Target Country stores to K Hub stores and completion of the first phase of the restructure of the Target store support office,” Rob stated.
“The restructuring of Target will continue over the next year, with a focus on improving the commercial viability of the business, including the ability to further reduce costs by leveraging Kmart and Catch.”