Rare slump blamed on ‘patchy’ end-of-year conditions Not all OK at Kmart
WESFARMERS managing director Rob Scott has blamed “patchy” retail conditions in November and December for a sales slump at discount department store heavyweight Kmart.
But Mr Scott said he does not believe consumers are in distress as they face falling property prices, stagnant wage growth and higher energy and fuel bills.
Mr Scott also said a reluctance by Kmart to discount as deeply as it did last Christmas had prompted the rare sales retreat, which occurred during the crucial holiday trading period.
“Overall customers are value-conscious,” Mr Scott said yesterday.
“There are some cost-ofliving issues out there, but overall Christmas trading was broadly in line with our expectations.”
Kmart has traditionally been one of Wesfarmers’ top better view of a retailer’s performance.
As well as weaker sales in womenswear, Wesfarmers said the decision by Kmart to stop selling DVDS had also affected the overall result.
Wesfarmers also owns Bunnings, Target and Officeworks.
In Target, total half-year sales increased by 0.2 per cent while like-for-like rose 0.5 per cent.
Shareholders were warned at its annual meeting in November that strong sales momentum at Kmart would start to moderate.
Mr Scott said consumers were aware of the pressures on their budgets but, at this stage, were not shunning stores or radically pulling back on spending.
“We don’t see any evidence that there is a broad change in consumer spending across the board,” he said.
“We find that when we get our offer right, we can generate good sales.”