By James Atkinson
Coles Liquor now has $94 million to spend on reshaping its store network in order to take the fight to Woolworths.
Wesfarmers this week informed the market that the $94 million provision for Coles Liquor would partially counteract the $1 billion-plus profits from the sale of its insurance underwriting business – along with a $680 million impairment associated with Target.
"This provision relates to recently initiated activities to be implemented during FY2015 largely associated with store network restructuring, which will enable the liquor business to improve the customer experience, increase store network productivity and establish a solid base for future growth," Wesfarmers said.
Citi analyst Craig Woolford said the charges were "not a surprise, but reinforce challenges facing parts of Wesfarmers".
"We view the problems as structural and store closures necessary, without quick wins," he said of Coles Liquor.