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| Target, Kmart sales still falling |
   
| Wesfarmers MD Richard Goyder: Kmart trend "encouraging" |
Posted Date: 02/02/2012
By Inside Retail
Wesfarmers MD Richard Goyder says he is pleased with the performance of the company’s Kmart and Target discount department store businesses despite both brands posting poor second quarters which included the important Christmas trading period.
Target’s sales in the six months to December were down 2.5 per cent on the previous corresponding period at $2.1 billion, with comp store sales down 3.5 per cent. For the last quarter, including Christmas, sales were down 3.1 per cent on both a comp store basis and overall.
Kmart’s sales for the half year were down 1.4 per cent on a comp store basis at $2.3 billion.
But during the last quarter, Kmart’s comp sales slid 2.7 per cent. The company says it posted the eighth consecutive quarter of growth in transaction volume and unit sales, citing deflation as the reason for the decline.
Goyder is positive that turnaround strategies for both brands are working in what is a challenging retail environment.
“Kmart and Officeworks continue to benefit from initiatives put in place to reposition these businesses. It was encouraging to see that both divisions reported another quarter of strong growth in both units sold and customer transactions although sales were affected by the deflationary pricing environment,” Goyder said in a statement.
“Target experienced difficult trading conditions in the quarter with total sales declining 3.1 per cent. December sales were, more encouraging as the business took steps to improve promotional effectiveness and stock management.”
Goyder said in a retail environment where consumer sentiment “remained subdued”, each of Wesfarmers’ retail businesses had managed their seasonal inventory positions well with appropriate levels of good quality inventory on hand, which would be of benefit going into the second half.
Target MD Dene Rogers said total sales for the quarter had been negatively affected 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.
“While customer numbers were down across the quarter, there was a noticeable improvement in December as the business took steps to improve its promotional effectiveness.
“We also increased our focus on inventory management to ensure that stock on hand is appropriate as we approach the change in season,” Rogers said.
Target opened six new stores and refurbished 13 stores during the quarter.
Kmart MD Guy Russo said it was pleasing to record another quarter of 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,” Russo said.
During the quarter, Kmart continued to focus on refreshing its stores with the completion of three store refurbishments, including the re-opening of a store in New Zealand following earthquake damage in February 2011. Kmart Tyre and Auto opened five new stores during the quarter. |
Friday, February 03, 2012 by steve
I now find K-mart a frustrating place to shop. They have reduced alot of their name brands down to one generic brand, which is low cost but also usually low quality. It has almost become a glorified junk store. Alot of people I have spoken to have noticed this also and now shop elsewhere as there is not the variety of brands there was before.
Thursday, February 02, 2012 by Jennifer Ward
K Mart made a big mistake when it stopped the on line weekly 'specials'. People have to be enticed into shops these days- wandering around crowded and confusing shopping malls is an extremely unpleasant experience- I especially resent having to pay parking fees as well.
Thursday, February 02, 2012 by HIS
Would have thought that 6 months of trading down consituted a Recession.
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