Page 32 - HW July 2020

global eyes
A tale of two halves for Aussie hardware
BOTH WESFARMERS’ AND Metcash’s hardware arms saw improved sales and progress towards year end as Aussies emerged from lockdown.
In spite of this upturn however, it’s clear that Australian retail is not going to be just plain sailing from here on in...
SECOND HALF RESCUES BUNNINGS’ YEAR
On 9 June, and fast approaching the end of its current nancial year, Wesfarmers issued a trading update to the end of May.
“Signi cant demand growth” had continued for Bunnings with sales growth picking up signi cantly in the second half.
Indeed Bunnings ANZ’s H1 sales were +5.8%, increasing to +19.2% for H2 to the end of May and +11.3% for the year to date.
Relating to Bunnings in Australia, the company reported “strong sales
... supported by continued growth in consumer and commercial markets across all major Australian trading regions and in all product categories.”
ere was no mention speci cally about Bunnings in New Zealand, except for a heads-up about some AU$70 million of NZ-speci c costs this FY as
a result of restrictions on trading, the closure of seven small-format stores, the “accelerated rollout” of the NZ online o ering and the write-o of its legacy e-commerce platform assets.
In terms of other extraordinary
costs so far this FY, there’s also special mention of Bunnings’ AU$20 million investment in additional cleaning, security and protective equipment to respond to Covid-19 over the last three months.
In terms of how Wesfarmers fared overall during the recent virus-driven
shift to online, for the calendar year to date, total online sales across all banners were +89% while for the nancial year to date, total online sales grew 60% to AU$1.4 billion.
Of the other Wesfarmers brands, O ceworks and Catch stand out for their double-digit growth, Kmart fared well enough despite variable weekly sales, while Target’s negative growth continued.
So, although noting progress, as with most Aussie corporates in the current climate, there was a caveat:
“Given the signi cant changes to the usual customer shopping patterns and expected future changes to government measures, it is uncertain whether the higher levels of sales growth will continue for the remainder of the calendar year.”
Wesfarmers’ full year results are due for release in August.
www.wesfarmers.com.au
H2 ALSO IMPORTANT FOR METCASH
e second half of the nancial year was also important for Metcash and its Independent Hardware Group (IHG) banners Mitre 10 and Home Timber & Hardware (HTH).
Total year-end sales for Metcash’s hardware banners fell 1.3% to AU$2.08 billion, “re ecting the impact of the slowdown in construction activity on trade sales” and the loss of a large HTH customer in QLD.
Total hardware sales fell by 2.8% for the 10 months to February (pre COVID-19 impact), and H1 was negative 4.2%, but H2 saw a “signi cant improvement” with
30 NZHJ | JULY 2020
MORE AT www.hardwarejournal.co.nz