Australia’s love of home improvement is paying dividends for Wesfarmers.
Hardware chain Bunnings is leading the latest quarterly sales results for Wesfarmers, Australia’s biggest private employer.
Total sales in the third quarter for Bunnings Australia and New Zealand were up 7.7% to $2.8 billion compared to the same three months last year.
Store-on-store growth was 6%.
For the financial year to date, total sales were up 8.1% to $8.7 billion. Store-on-store growth was 6.3%.
In 2016, total store sales grew 11.5%.
Bunnings managing director Michael Schneider says market conditions were “varying” during the quarter.
“An ongoing focus on delivering our strategic agenda continued to provide positive outcomes,” says Schneider.
“We continue to invest strongly to deliver a winning offer to customers.”
Bunnings is benefiting from the housing boom, especially in NSW and Victoria, and from a shrinking competition.
Woolworths closed its Masters stores in December and is selling off the property and the sock from the hardware chain.
The Masters business has been losing about $200 million a year. Writedowns of more than $4 billion before tax on its hardware business and flat supermarket sales brought Woolworths to its worst loss in 20 years.
But the Bunnings formula is so successful that Wesfarmers has exported it to the UK.
In the latest results, the Bunnings UK business reported total sales for the quarter of £245 million ($A400 million).
“Our first Bunnings Warehouse pilot stores have been well received by customers, team members, and the community. The team continues to progress the strategic plan and is focused on building strong foundations,” says Bunnings UK mManaging director PJ Davis.
The first Bunnings Warehouse pilot store was opened during the quarter. A second pilot site was opened on April 12. Wesframers also has 254 Homebase stores in the chain it bought for £340 million ($A585 million) in February 2016.
In other Wesfarmers divisions, headline food and liquor sales at Coles were up by 1.2% during the quarter.
Kmart’s sales increased 2.5% to $1.1 billion but Target, still in the middle of a restructure, posted a fall of 18.1% to $555 million.
Officeworks reported a 9% rise to $558 million.
The top line results at a glance:
Business Insider Emails & Alerts
Site highlights each day to your inbox.