Wesfarmers reports Coles’ market share stabilising as restructure continues
Wesfarmers, Australia’s largest employer and owner of Coles supermarkets, has announced that the market share of Coles has begun to stabilise as initiatives to transform the business continue in earnest.
The company reported a net profit of $1,050 million for the 2007/08 financial year, an increase of 33.6% on last year due, in part, to the integration of Coles Group.
“The acquisition of the major businesses of Coles, Target, Kmart and Officeworks has materially expanded Wesfarmers’ operations, scale and engagement in Australian
retailing,” Managing Director of Wesfarmers Richard Goyder advised. “Significant financial, human and infrastructure resources have been committed to bring about a material repositioning and performance improvement in these businesses over the coming years.”
Mr Goyder reported that the restructure of Coles is going to plan and maintained the warning that five years will be required to turn the business around. “A significant amount has been achieved since we acquired the group last November,” he said. “Since the acquisition of Coles there has been significant reductions in above-store employee numbers, the appointment of new management teams and development of five-year plans and budgets – all of which are continuing to lay the foundations for improved performance and dismantle barriers to growth. Results for the Food and Liquor business for the seven months reflect the fact that we are still in the early stages of a five-year turnaround.”
“As we’ve said previously, the changes won’t suddenly be obvious on a particular day or date, but I continue to strongly believe that the results of progress made to date, and
the strategies being planned, will deliver value to our shareholders and our customers.”
The new management team has been in place since the beginning of the month and they plan on further “simplifying the product range”, having a greater focus on lower prices, implementing stronger inventory control, altering the store format and improving the efficiency of their distribution network. A brand strategy review is also set to take place in their liquor division.