Target sales in decline

Wesfarmers’ discount department store chains are both struggling – but the news is worst at Target.

According to parent Wesfarmers’ first quarter sales results released Thursday, Target’s same store sales were down 4.1 per cent against the same quarter last year.

After taking into account new stores, sales were still down, by 1.4 per cent, to $835 million.

Outgoing MD Launa Inman said “difficult trading conditions” continued through the first quarter with the business remaining focussed on competing effectively in the current environment.

“Customers continue to be very value driven and their behaviour is being influenced by the continuous promotions and heavy discounting in the marketplace.

“Trading conditions were tough. August was the only month with a positive sales outcome and we are seeing the poor sales outcome in September extending into October,” Inman said.

“In particular, sales of electrical related goods and entertainment categories were well down on the previous year,” said Inman.

Target refurbished 13 stores during the quarter while two new stores were opened. None were closed.

Over at Kmart, the more downmarket of the two chains, sales totalled $927 million for the quarter – up just 0.1 per cent over the previous corresponding period. Same store sales rose 0.5 per cent.

MD Guy Russo said the apparel and home categories performed well during the quarter, with softer performance seen in areas that had recently undergone a significant range or promotional change.

“We continue to serve more customers and sell more items than we did last year at lower prices. In August we launched our ‘OK’ campaign to reinforce the message to our customers that Kmart remains focussed on providing irresistibly low prices on everything, everyday,” Russo said in a statement.

Kmart refurbished one store during the period and opened three new Kmart Tyre and Auto service centres.

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