Wesfarmers’ investment in digital assets pays off as online sales jump 57%
The Australian distribution group Wesfarmers saw its results jump for the year 2021, reporting a 40% increase in its net profit after tax to 2.38 billion Australian dollars.
Chief executive Rob Scott reported that the conglomerate – which is made up of Bunnings, Officeworks and Kmart Group – generated total revenue of just under A$34 billion, a 10% increase on last year, for the period ending June 30, 2021.
“While COVID-19 had a significant impact on operations during the year, the group’s activities continued to focus on building deeper relationships and trust with customers,” a- he declared.
“Bunnings, Kmart Group and Officeworks delivered strong sales and profit growth for the year. While customer demand remained resilient, sales growth for Bunnings, Officeworks and Catch moderated from the mid-March as companies began to experience high demand after the onset of COVID-19 the previous year. Pleasant to see that sales growth from mid-March remained strong over two years in all of the group’s retail activities.
Scott also clarified that an increase in digital engagement led to a 57% growth in the group’s online sales, excluding Catch, to A$2.4 billion. Including Catch, online sales reached A$3.3 billion. Online sales for the Kmart Group – which includes Kmart, Target and Catch – rose to A$1.9 billion for the year.
“This was partially offset by higher operational costs associated with online fulfillment and continued investment in Kmart’s technology,” Scott said.
“Kmart continued to invest in key strategic initiatives to improve its customer offering, increase the resilience and flexibility of its supply chain, and support the development of data and digital assets and capabilities.”
Meanwhile, gross capital expenditure rose 3.3% from a year ago to A$86 million, which also included investments in enterprise data and digital.
“The group has begun development of a data and digital ecosystem that will enable a more seamless and personalized customer experience across all retail businesses,” Scott said.
Looking ahead, the company said it will continue to grow its data and digital ecosystem.
“Progress has accelerated in the development of a data and digital ecosystem, which will provide customers with a more seamless and personalized digital experience in Wesfarmers’ retail operations,” the company said.
“To support this initiative, operating expenditure of approximately A$100 million is expected to be incurred over the next 12 months. offer even more value, quality and convenience.”