By Andrew Starke

Wesfarmers has seen its share price slump after announcing its retail sales results for the fourth quarter and the 2011 full-financial year, despite Coles outperforming its supermarket rival Woolworths.

Managing director, Richard Goyder, said that the retail division’s sales performance for the year was solid, especially given the backdrop of declining consumer confidence, significant price deflation and adverse weather conditions experienced during the period.

“A highlight of the result was the continuation of the strong sales momentum in Coles and Bunnings, building on strong results from the previous year,” he said.

“Coles’ food and liquor comparable store sales growth of 6.3 per cent for the year, following 5.0 per cent growth last year, reflects the pleasing customer response to changes made throughout the business to build trust in Coles’ value, quality and service.”

Coles recorded comparable food and liquor store sales growth of 6.3 percent for the financial year1 (FY2010: up 5.0 per cent), with comparable food and liquor stores sales growth of 5.2 per cent in the fourth quarter.

While these figures put it ahead of Woolworths in comparable store sales growth, Coles liquor business appears to have lost market share to its rival.

Coles managing director, Ian McLeod, said the liquor market remained challenging in the fourth quarter given weaker discretionary spending.

“Despite the tough market conditions we experienced encouraging growth in our 1st Choice stores and intend to continue our investment in these larger formats as customer purchasing patterns change,” he said.

However this was offset by softer sales at Cole’s Vintage Cellars and Liquorland.

Coles opened 13 new liquor stores and closed 11 liquor stores in the quarter, for a total of 785 liquor stores at the end of the 2011 financial year.

Shares in Wesfarmers were trading at $29.30 at 3pm today (July 29), down from $31.21 seven days ago. 


The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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