Shoppers grab lower cost items at Kmart in cost of living crunch, says Wesfarmers CEO | The Business
The owner of well-known Australian retailers such as Bunnings, Kmart, Priceline, Target and Officeworks posted a $2.9 billion net profit the financial year – down 1.8 per cent – as cost-conscious consumers hunt for bargains.
Wesfarmers chief executive Rob Scott says the interest rate hikes and higher inflation, as well as the Iran war, have contributed to a weaker consumer.
He says customers are now being ‘very deliberate’ with their purchases as they face a cost-of-living crunch.
Wesfarmers brands Kmart and Bunnings posted earnings growth of 6 per cent and 5 per cent respectively in the year to June, as customers look for cheaper options.
When asked how much the company was relying on the Anko brand to do the heavy lifting for Wesfarmer’s profits, Rob Scott said, “you could say that Kmart is as much a product development company as it is an amazing retail company, and we’re starting to use that Anko product development and sourcing capability and extend that into new categories.”
Those extensions include launching a furniture element, as well as own brand options in Officeworks. The stationary chain’s earnings fell 22.2 per cent. Mr Scott says the weaker Officeworks results came from a restructure over the past 12 months.
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