Wesfarmers Ltd. (WES), Australia’s largest employer, posted a 4.9 percent increase in first-quarter food, liquor and convenience sales as consumer confidence rose after the national election on Sept. 7.
Sales from its Coles supermarkets, liquor-store and convenience chains reached A$8.9 billion ($8.6 billion) in the three months ended September, Perth-based Wesfarmers said in a regulatory statement today. Those from food and liquor stores open at least 12 months increased 3.4 percent, compared with 4 percent growth expected by the median of four analysts surveyed by Bloomberg.
Wesfarmers is the first major Australian retailer to report quarterly results after the Sept. 7 election, in which Prime Minister Tony Abbott’s Liberal-National coalition won control from the Labor party. Australian consumer confidence hit its highest level in almost three years in September after interest rates were cut to a record-low 2.5 percent and the election victory ended three years of minority government.
“Consumers have collectively upgraded their assessment of the economy,” according to a JPMorgan Chase & Co. note to clients on Sept. 11. “An improvement in the growth outlook for the region, solid price gains across the housing sector, and the change in government” were responsible for the improvement, they wrote.
Wesfarmers shares fell 1.7 percent to A$41.30 at 10:16 a.m. in Sydney, paring this year’s advance to 12 percent.
Sales from the Bunnings home-improvement outlets rose 10.3 percent to A$1.99 billion while those from Target, Australia’s biggest department store chain by outlet numbers, dropped 6.1 percent to A$789 million. Sales at the discount Kmart department store chain increased 4.6 percent to A$970 million.
Food and liquor prices fell 2.5 percent during the quarter due to “significant produce deflation” and discounting, according to the statement.
To contact the reporter on this story: David Fickling in Sydney at email@example.com
To contact the editor responsible for this story: Stephanie Wong at firstname.lastname@example.org