Wesfarmers online sales rise in 1H22 as COVID-19 kept stores closed

Wesfarmers chief executive Rob Scott described the first half of fiscal 2022 as the “most disrupted time” for the company since the start of COVID-19, due to extended government-mandated store closures. and trade restrictions in Australia and New Zealand.

On Thursday, the giant retail group reported net profit after tax down 14% from A$1.41 billion to A$1.21 billion for the half. Earnings before interest and tax also fell 12% to A$1.9 billion.

Revenue was flat at A$17.7 billion, partly supported by the 37.5% rise in online sales across the group to A$1.9 billion, excluding Catch. Including Catch, that was A$2.5 billion.

Of total online sales, Kmart Group, which includes Kmart, Target and Catch marketplace, contributed A$1.4 billion, following a 22% year-on-year increase.

According to Scott, Wesfarmers increased its investment in digital capabilities during the period, particularly in building its data and digital ecosystem, which helped support increased online sales across its retail activity.

“This included investments in the shared data asset and scalable customer data architecture as well as the continued development of capabilities within the Advanced Analytics Center, specialized technical expertise and robust data governance,” said he declared.

During the period, the company also created a new data and digital division in which it appointed Nicole Sheffield as head.

While reporting for the data and digital division will remain as part of the business for FY22, the company said this will be separate from FY23.

Consistent with previous forecasts, operating expenses associated with the group’s data and digital ecosystem are expected to be around A$100 million in fiscal year 2022, the company said.

“Thanks to the progress made in recent years to develop deeper customer relationships, stronger digital engagement and expanded ranges of everyday products, the group’s retail businesses are well placed to manage the transition as COVID-related restrictions are relaxed,” the company said.

“The Group’s retail business will continue to focus on meeting changing customer needs and delivering even better value, quality and convenience to customers. The investment in The divisions’ digital capabilities will continue and should support improvements in customer value propositions, expansion of addressable markets and delivery of operational efficiencies.”

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David A. Albanese