Bunnings is still killing it

Bunnings. Photo: Wikipedia.

Bunnings sales jumped a stunning 11.6% in the September quarter to $2.5 billion.

The result for the DIY stores is a significant contributor to the Wesfarmers group, Australia’s biggest private employer.

And it shows how badly the rival Masters business has been tracking for Woolworths, which is reported to be considering ditching its investment in home improvement after around $600 million in losses.

At Bunnings, the quarter like-for-like growth, stripping out new stores, was 8.2% for the quarter, still a big result.

During the quarter, three Bunnings Warehouses and one smaller format store were opened. Another 14 sites are under construction.

In other parts of the business, food and liquor sales at Coles supermarkets outperformed expectations, rising 4.7% to $7.631 billion for the September quarter.

Total Coles sales rose 2.1% to $9.426 billion. The overall result was dragged down by convenience stores, including fuel at Coles Express, where sales fell 7.8% to $1.795 billion.

The good supermarket result was helped by food and liquor prices, mostly fresh produce and grocery, falling an average 1.3%, the biggest quarterly deflation in two years.

CEO Richard Goyder says good momentum in the retail portfolio continued through the first quarter of the 2016 financial year.

Sales at Officeworks grew 6.5% to $429 million, Kmart 12.5% to $1.1 billion and Target was up 3.1% to $776 million.

“Our retail divisions remain focused on delivering increased value, better service and improved ranges to customers with actions for the Christmas trading period well advanced,” says Goyder.

Both the big supermarket groups, Coles and Woolworths, are being squeezed by increasing competition including from the German giant Aldi which has been moving in on the east coast and now has about 11% of the Australian market.

But Coles has been performing well ahead of Woolworths. For the 2015 financial year, Coles increased sales by 3.9% while Woolworths could manage only 0.7%.

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