MORE time working from home and the opportunity to start projects around the house due to the coronavirus lockdown saw sales numbers for Wesfarmers chains Bunnings and Officeworks surge, along with an 89% jump in online sales.
Following the easing of trading restrictions in New Zealand and north western Tasmania, the group’s retail networks have returned to full operation.
Hardware chain Bunnings saw an uplift in all product categories and sales in the year to date are up 19.2%. However, the chain will incur costs of about $70 million for the current financial year because trading restrictions in New Zealand, the permanent closure of seven small-format stores during the half, and the accelerated roll-out of its online offering, including the write-off of legacy e-commerce platform assets.
Bunnings has invested approximately $20 million in additional cleaning, security and protective equipment in response to COVID-19 over the last three months.
In Officeworks, continued demand for technology, home office furniture and learning and education products has propelled sales this year to a 27.8% increase.
Discount department chains Kmart and Target have seen general increase in customer footfall in shopping centres and a recovery in customer demand for apparel, particularly winter clothing.
Demand for Kmart products in the home and living ranges has resulted in availability issues and is expected to impact sales in June. Additional operating costs associated with COVID-19, and the temporary closure of New Zealand stores, will also impact Kmart Group’s earnings in the 2020 financial year.
The announcement comes just weeks after Wesfarmers revealed it would shut or convert 167 Target and Target Country stores across Australia to Kmart after phase one of its review of the struggling chain.
On a financial year to date basis, total online sales across the Group increased 60% to $1.4 billion, or $1.9 billion including online retailer Catch, which Wesfarmers acquired last year.
Wesfarmers said the online sales growth reflected its investment in e-commerce capabilities in recent years, as well as greater customer preference for shopping online during COVID-19.
