Wesfarmers CEO Rob Scott says the rising cost of living has seen value-conscious shoppers head to Kmart and Bunnings.

Speaking after the Perth-based conglomerate’s annual general meeting this morning, Scott noted how its retailers are seeing heightened sales momentum.

“I think certainly the cost pressures on consumers are increasing and energy costs are a key part of that, and that is why we are already starting to see consumers be more value-conscious,” Scott said.

“Australian consumer demand continues to be supported by low unemployment and high levels of accumulated household savings, but rising interest rates and the impact of inflation are starting to affect consumer behaviour.

“Over recent months, shopping patterns and customer feedback indicate some customers are becoming more price-sensitive as they try to manage household budgets. We see these conditions as an opportunity for our businesses, which are well-known for their everyday low prices, to outperform relative to others in their markets.”

Scott noted that Kmart tended to fare well when budgets are pinched, while Bunnings is an evergreen business.

“Over many different cycles Bunnings has shown itself to be a quite a resilient business,” he said.

“There is a lot of spend within Bunnings that is diverse across consumer and commercial customers. We always expand our range and addressable market. There is also a lot of necessity spending, repair and maintenance, and that continues independent of housing cycles.

“So across our group I think our businesses are well positioned for a more value-conscious customer, and energy prices are one of a number of cost pressures households are facing.”

“I think certainly the cost pressures on consumers are increasing and energy costs are a key part of that, and that is why we are already starting to see consumers be more value-conscious.”

Scott says Wesfarmers were pleased with overall sales during the 2023 financial year to date.