Wesfarmers has revealed lacklustre retail sales figures for its discount department stores Target and Kmart, for the 12-week period from January, 2011 to March, 2011.
According to a statement on the Australian Securities Exchange today, while total sales for Target during the third quarter were in line with the corresponding period at $724 million, they were down 2.4 per cent to $2.9 billion for the financial year to date (June 27, 2010 to March 26, 2011).
Sister company Kmart also reported a 2.5 per cent drop in retail sales during third quarter period to $803 million and comparable store sales declined by 3.3 per cent. Sales for the financial year to date were up marginally by 0.7 per cent to $3.1 billion.
Target managing director, Launa Inman said a difficult trading environment was to blame for the retailer's slow sales during the third quarter.
“While customer numbers and sales volumes were up up the same time last year, trading continues to reflect the impact of price deflation across the market, along with the end of season measures taken to clear stock,” she said.
Kmart managing director Guy Russo echoed Inman's comments and said that while sales volumes for basic everyday items continued to be strong, categories previously driven by promotional activity have been subdued in comparison.
“The Kmart business of today is very different to that of the past. During the quarter, a number of initiatives were trialled with varying degrees of success and a limited history to guide us,” he said.
Despite disappointing sales figures, both department stores have continued to invest in their store networks with the launch of one store each during the third quarter. Kmart also upgraded four stores during the period, and Target refurbished nine outlets.
Target Australia also recently launched an e-commerce site – shop.target.com.au – joining Kmart and other department stores such as Myer, Big W, and David Jones, who have recently added online shops to complement their bricks-and-mortar outlets.