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Tag: Wesfarmers

  • Australian Retailers Sound Caution as Early Fiscal 2027 Sales Slow

    Australian Retailers Sound Caution as Early Fiscal 2027 Sales Slow

    JB Hi-Fi reported a 1.4 per cent drop in Australian sales between July and September, leading a batch of warnings across the country’s listed retail sector ahead of peak holiday trade.

    The contraction follows record sales across fiscal 2026, catching investors off balance as early fiscal 2027 trading updates exposed soft consumer sentiment. Three major retail operators, JB Hi-Fi, Wesfarmers, and Super Retail Group, shed a combined 450 points on the ASX after delivering their pre-annual general meeting trading numbers.

    Household Goods Face Margin Squeeze

    Weakness extended beyond consumer electronics into whitegoods and home renovations. JB Hi-Fi reported that sales at its appliance arm The Good Guys dropped 0.4 per cent during the three-month opening quarter. Its kitchen retailer, E&S, fell sharper, booking a 4.5 per cent sales drop over the same period.

    Shoppers across Australia are delaying standard purchases to wait for steep discount cycles. JB Hi-Fi told shareholders that October turnover showed further deceleration, leaving store networks dependent on heavy promotional volumes to salvage the first half.

    “In October, the group has seen sales slow ahead of the important Black Friday and Christmas trading periods. As always, the group will continue to focus on driving demand and growing market share through creating great value offers for its customers and delivering exceptional customer service.”

    Hardware Pulls Back While Discount Stores Hold

    Diversified conglomerate Wesfarmers pointed to uneven conditions across its divisions. Flagship home improvement business Bunnings recorded dwindling sales momentum after years of outsized pandemic and post-lockdown DIY demand. By contrast, budget department store Kmart and office supplies chain Officeworks sustained stable customer transaction levels.

    Super Retail Group Tracks Sector Slowdown

    Automotive and outdoor leisure operator Super Retail Group matched the downbeat assessments from electronics and home improvement sellers. The group runs Supercheap Auto, Macpac, Rebel, and BCF across Australian shopping centres and retail parks.

    Managing director and chief executive Paul Bradshaw stated that like-for-like sales growth moderated across the group during the opening months of fiscal 2027. Discretionary spending cuts and lingering consumer anxiety hit transaction values across sporting goods, camping gear, and vehicle accessories.

    Trading Focus Shifts to November Volumes

    Australian retailers relied on strong pricing power through fiscal 2026 to offset wage rises, high energy bills, and rent increases. That pricing use has evaporated, leaving merchants exposed to discounting wars to protect foot traffic.

    The immediate test for retail margins lands in late November when Black Friday promotions run across physical store networks and e-commerce platforms. Store groups must now balance inventory clearances against margin erosion as annual general meetings continue through November.

  • Australia Post Prepares for 120 Million Parcels as Peak Volumes Rise 7.8 per Cent

    Australia Post Prepares for 120 Million Parcels as Peak Volumes Rise 7.8 per Cent

    Australia Post expects to handle more than 120 million parcels during the year-end shopping period, recruiting 3,900 casual staff after volumes rose 7.8 per cent over four weeks.

    The postal carrier projects total seasonal volume growth between 6 and 8 per cent compared to the same stretch last year. Logistics managers and retail executives outlined their operational readiness during Australia Post’s Peak Halftime Huddle briefing, detailing delivery cut-offs, inventory flows and margin pressures across the Australian retail sector.

    Network Deadlines And Labour Capacity

    StarTrack Road Express shipments face a final lodgement deadline of December 19 to guarantee delivery before Christmas Day. Standard Parcel Post items must enter the network by December 21 for most Australian destinations. Express Post, StarTrack Premium and metro services maintain operations until December 23.

    Shane Plant, executive general manager of network operations at Australia Post, confirmed the 7.8 per cent jump in lodgements recorded across the preceding four-week window. The state-owned carrier is deploying temporary sorting labour across major hubs to clear intake spikes before parcel bottlenecks reach regional distribution centres.

    Carriers across the Asia-Pacific region face similar volume concentrations as year-end discount events pull fourth-quarter demand forward. Australian merchants run narrower transport buffers than regional counterparts in Japan or Singapore because of domestic transit distances, leaving little margin for warehouse sorting delays or misrouted freight.

    Australian Retail Council chief executive Chris Rodwell warned that higher gross sales do not guarantee healthy earnings. Heavy promotional discounting across Cyber Weekend threatens net profit margins if retailers rely entirely on markdown pricing to hit revenue targets before trade slows in January.

    Discount Fatigue And Margin Protection

    Consumer behaviour shows tighter spending discipline despite rising parcel volumes. Research cited by Victoria Devine, founder of financial education platform She’s On The Money, showed 81 per cent of Australian shoppers compare prices across multiple merchants before buying. Another 59 per cent stated they refuse to purchase products at full ticket price.

    Early buying patterns have also shifted. Last year, 29 per cent of consumers completed their holiday purchases early, compared with just 8 per cent who waited until the final weeks of December. Retailers face shoppers who are prepared to delay purchases until automated price drops trigger.

    Kip&Co chief executive Chris Miles said the homewares merchant is introducing exclusive product ranges and partner collaborations rather than discounting entire core catalogues. Wesfarmers Health general manager of e-commerce and loyalty Leela Sennitt reported that its Pulse Rewards program is deploying value-add incentives, early access windows and member gift packs to protect base product margins.

    Store Operations And Click And Collect

    Adairs Group is handling higher store pickup traffic to bypass peak courier charges and delivery cutoff constraints. Chief executive Elle Roseby reported double-digit growth in click-and-collect orders, prompting the business to overhaul store fulfillment processes and eliminate split-order shipments from separate regional warehouses.

    Physical store networks provide crucial fulfillment relief when carrier collection windows close. Retailers that integrate inventory systems between point-of-sale registers and distribution centres convert foot traffic into incremental sales, capturing add-on purchases when shoppers arrive at stores to collect parcels.

    Earlier supply chain audits across the Australian retail sector identified split fulfillments as a primary driver of customer support costs and freight surcharges during the 2023 holiday rush. Resolving order grouping before dispatch protects trading margins against multiple last-mile courier fees.

    Fulfillment Errors And Packaging Friction

    Automated sorting systems face processing disruptions from unreadable barcodes and non-standard parcel dimensions. Australia Post executive general manager for parcel post and e-commerce services Gary Starr pointed to warehouse labelling standards as a critical factor in network throughput.

    “It sounds really basic, but a bad label can’t get read, goes around the machine three times, takes up a cell that another parcel could have been on,” Starr said.

    Retailers are running out of time to reconfigure packing lines before Cyber Weekend lodgements peak in late November. Carrier sorting centres will begin applying standard processing cutoffs as the December 19 freight deadline approaches.

  • Pharmacy Guild Leaders Buy Seven Priceline Pharmacies from Failed Infinity

    Pharmacy Guild Leaders Buy Seven Priceline Pharmacies from Failed Infinity

    Pharmacy Guild current president Trent Twomey and predecessor George Tambassis have bought seven Priceline pharmacies from the failed Infinity Pharmacy network.

    Infinity was the largest franchisee of Wesfarmers’ Priceline Pharmacy, operating 91 stores nationwide before entering receivership late last year due to massive debts.

    Breakup of a national network

    Administrator Teneo is selling the chain, with Queensland-based operator Chempro Chemists buying most stores, while Twomey and Tambassis secured seven outlets after lacking funds to buy more.

    Infinity operated nationwide under Wesfarmers’ Priceline banner until mounting liabilities forced it into insolvency. Teneo opted to break up the estate into regional parcels when a single whole-network buyer failed to materialize.

    Consolidation across community pharmacy

    The asset sale reveals how established operators are cherry-picking prime shopfronts while heavily geared roll-up models stumble. Twomey already controls eight sites through the Alive Pharmacy Network in North Queensland, while Tambassis operates pharmacy locations across Victoria.

    Absorbing selected units into existing regional structures offers immediate retail footprint without taking on Infinity’s failed holding company debts. For Wesfarmers, keeping these dispensaries trading under the Priceline banner prevents store losses to rival banners like Chemist Warehouse.

    Administration enters final stages

    Infinity entered receivership late last year after severe cash flow problems crippled its ability to service debt across 91 locations. The Pharmacy Guild, which represents roughly 6,000 community pharmacies across Australia, continues to see its top leadership expand their private store networks through these distressed sales.

    Teneo is completing final asset transfers across the remaining retail sites to wrap up the liquidation process.

  • Australian Shoppers Shift to Private Labels as Discretionary Sales Drop

    Australian Shoppers Shift to Private Labels as Discretionary Sales Drop

    Australian supermarket chains lifted private-label grocery sales by up to 6.1 per cent in fiscal 2026 as stubborn inflation squeezed household budgets. Coles Group reported that own-brand revenue outpaced overall company growth, with one in three customer baskets now containing its private-label lines.

    Woolworths Group recorded a 5.5 per cent increase in own and exclusive brand sales over the same period. Budget department store Kmart, operated by Wesfarmers, delivered resilient sales, while rival Big W returned to profitability before early fiscal 2027 trading slowed.

    Private Labels Win Margin and Volume

    Household goods retailers experienced a sharp pullback in consumer demand. Furniture chain Nick Scali reported that customer traffic fell by up to 15 per cent in the quarter to August as residential property turnover slowed. Australian same-store sales at Harvey Norman dropped 3.4 per cent, and electronics chain JB Hi-Fi posted its largest single-day share price decline since 2020 after missing consensus sales estimates.

    Quick-service dining networks faced similar pressure. Retail Food Group, which operates Gloria Jean’s and Donut King, booked an annual decline of roughly 3 per cent in domestic network sales. Automotive parts maker ARB posted a 3.3 per cent drop in Australian aftermarket revenue, while used-car transactions across the country fell 16.2 per cent in June.

    Property Slump Stalls Discretionary Demand

    Consumer price inflation has held above 3 per cent since 2025, outpacing wage growth of 3.2 per cent in the June quarter. With Commerzbank calculating that 60 per cent of Australian household wealth is tied up in residential real estate, higher borrowing costs and property tax adjustments targeting investors have directly curbed big-ticket purchases.

    The divergence across retail categories mirrors trends across Asia-Pacific markets, where food retailers expand low-price private lines to capture defensive trade while durable goods sellers rely on promotional financing to prevent transaction volumes from falling further.

    Trading updates for the first eight weeks of fiscal 2027 show sales at Big W have already started to decline, making the upcoming quarterly retail trade data the next key benchmark for consumer demand.

  • Australian Retail Profit Lags Sales as Hidden Operating Costs Bite Margins

    Australian Retail Profit Lags Sales as Hidden Operating Costs Bite Margins

    Australian retail sales rose 2.8 per cent in the 2024-25 financial year, but operating profit before tax grew just 1.5 per cent to $38.8 billion as margin pressure intensified.

    Data from KPMG’s Retail Health Index shows that gap widening further into 2026, forcing boards to rethink conventional cost cutting.

    Retailers confronting squeezed margins often reduce store staff hours and trim marketing budgets. Advisory firm Olvera Advisors found these immediate cuts routinely fail to stop profitability leaks, which sit deeper in inventory management, returns handling and supplier contracts.

    Holding Costs and Inventory Drag

    Aged stock sitting in warehouses past 90 days creates an unmeasured drag on working capital. Benchmarking from APQC puts median inventory carrying costs at 10 per cent of value each year. A business holding $5 million in aged stock absorbs $500,000 annually in holding expenses before accounting for final clearance markdowns.

    Supplier renegotiations also remain narrowly focused on unit pricing rather than structural terms. Data from the Payment Times Reporting Regulator shows average retail payment terms at 31 days, though the 95th percentile extends to 77 days. Rebate structures frequently remain poorly tracked at the executive level, echoing findings from the Australian Competition and Consumer Commission’s supermarket inquiry.

    The Multi-Channel Fulfilment Trap

    E-commerce fulfilment and customer returns represent another growing source of unallocated operational losses. Total costs for a single product return average roughly $47 on an $80 basket, factoring in $20.78 for two-way freight, $10 in handling and an average $16 markdown. For a merchant processing one million orders annually, each single percentage point in return rate drains approximately $470,000.

    Similar accounting oversights previously hit Australia’s largest conglomerates. Woolworths paid $217.4 million for an 80 per cent stake in marketplace MyDeal in 2022 before shutting it in 2025 at a cash cost between $90 million and $100 million, alongside a $45 million impairment charge. Rival Wesfarmers similarly wound down its Catch marketplace after channel-level operating costs outpaced unit economics.

    Retail operators now face pressure from commercial lenders to present granular reporting on stock ageing past 90 days, net channel profitability and full-year return costs ahead of the next seasonal markdown cycle.

  • Coles spending $2.5bn on digital over the next two years

    Coles spending $2.5bn on digital over the next two years

    Supermarket Coles will spend $2.5 billion over the next two years on improving its digital offer, the business announced today.

    The business will seek to improve its online shopping, as well as its self-service checkouts, data and automation across its warehouses, in an effort to streamline the experiences and make it even simpler for Australians to buy their groceries.

    Coles’ chief executive Steven Cain said following its demerger from Wesfarmers, and the subsequent Covid-19 pandemic, the business is increasing its pace of change.

    “There’s a myriad opportunity facing us. The market in Australia is very good for food and liquor. It’s growing, there’s plenty of opportunities, and we think we’ve got the assets to exploit some of them,” Cain said.

    “It’s making sure you’re confident that you’ve got the right returns before you press the accelerator. And I think what we’re saying today is we’re pressing the accelerator.”

    According to Cain, when Coles was demerged from former parent company Wesfarmers it wasn’t as advanced as it could have been – there hadn’t been enough investment in its online capabilities at the time, something he is hoping to rectify now.

    These changes have been coming for a while. Last year Coles appointed former Walmart SVP Ben Hassing to the position of Coles’ chief executive e-commerce, who said in February the supermarket’s online transformation will focus on creating a seamless and unified customer experience.

    “To activate this, we are connecting e-commerce and content. And then we’ll begin merging online and offline into a unified experience,” he said.

    This became more important as the changes to shopping behavior throughout Covid-19 opened up new pathways to the ‘omnichannel shopper’: customers who shop both online and offline.

    “These digitally-engaged customers are very, very important to Coles. We find them more loyal, they shop with Coles more frequently and they have a higher participation rate in Flybuys,” Hassing said.

    “This is a fast-growing customer segment for us. The year-over-year growth in total spend with Coles is much higher, as well.”

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  • Wesfarmers to reposition Target

    Wesfarmers to reposition Target

    In a move to differentiate itself from sister brand Kmart, department store Target will see an accelerated transformation to offer higher quality apparel, soft homewares and toys.

    This shift will reposition the department store to compete against more specialty and middle-market offerings, and could keep Kmart and Target from potentially cannibalising one another’s sales.

    As a result, however, approximately 80 head office roles have been restructured. A Target spokesperson confirmed it is aiming to redeploy some of these staff into other parts of its business, or into the wider Wesfarmers group.

    Kmart Group managing director Ian Bailey said he believed it was the right time to recast Target against higher-quality competitors such as Cotton On, Myer, or Country Road, though at a more affordable price.

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  • Wesfarmers, Woolworths lead list of top 1000 Australian companies

    Wesfarmers, Woolworths lead list of top 1000 Australian companies

    Research firm IBISWorld on Tuesday revealed Australia’s top 1000 companies in 2018, with Wesfarmers and Woolworths placing within the top five.

    The list provides an overview of Australia’s corporate landscape, and highlights the largest firms, growing and declining sectors and new businesses to watch in the coming years.

    According to the report, over 75 per cent of the companies on the list lifted their revenue over the course of the year, with total revenue across the list having increased 1.5 per cent year on year, while over 70 per cent of businesses remained profitable.

    However, after enjoying the top position in 2017, IBISWorld senior industry analyst James Thompson expects Wesfarmers to drop from second position in the list next year due to its demerger from supermarket Coles.

    Source: IBISWorld

    There were a number of new entrants, including online retailer Kogan, which joined the list at number 910 after generating significant revenue due to its expanded service offering and the growth of Kogan Mobile. The online retailer enjoyed annual revenue growth of 10.6 per cent, totalling $231.8 million, over the 2018-19 financial year.

    Noni B, which entered the list at number 997, did so off the back of the successful integration of the brands it acquired from Specialty Fashion Group, which delivered revenue growth of 17.8 per cent for the year.

    Other notable retailers on the list include:

    • Metcash: 26
    • Aldi: 49
    • JB Hi-Fi: 56
    • 7-Eleven: 84
    • Harvey Norman: 123
    • Cotton On: 157
    • Myer: 158
    • Super Retail Group: 160
    • David Jones: 175
    • Costco: 244
    • Ikea Australia: 323
    • Luxottica: 480
    • The Reject Shop: 527
    • Accent Group: 612
    • Michael Hill: 710
    • Nike: 772
    • Amazon: 968
    • Retail Food Group: 995