A restructure at Kmart Group coupled with a reshaping of categories has paid off with the business recording record growth in a difficult Q3 quarter.
Revenue increased by 4.8% to $5,986m while comparable sales grew by 7.5%.
The mass retailer reported earnings of $601m, up 26.5% for the quarter.
Sales at Target declined 5.1%, while comparable sales growth at the struggling retailer was was down 2%.
Similar to Bunning another Wesfarmers owned business Kmart saw an increase in customer numbers, transactions and units sold.
Management claim that the digitisation of their supply chain resulted in improving availability of stock.
They also reported that the ongoing digitisation of sourcing and supply chain to further reduce lead times, improve availability and reduce costs allowing the business to grow margins while having stock available for consumers.
On the downside Wesfarmers reported that comparable sales at Target declined 2.9% with many questioning the future of the struggling business.
Management claim that Kmart is well positioned to continue to grow customer share of wallet in an environment where customers remain focused on value by maintaining strong price leadership with new discount programs tipped to be rolled out shortly.
Following an extensive investment in digital marketing the business is now looking to better engaging with customers through further investments in loyalty and personalisation.
The business also claim that they are now moving to expand the distribution of their house brand Anko home products into new markets globally.
They are also introducing the Anko range into the struggling Target stores.
The business also introduced a new OnePass member benefits program in the quarter.
What’s not know is the value that the integration of the Kmart and Target processes, systems and organisational structures will deliver moving forward when less people are shopping at Target.
Wesfarmers have not released a breakdown of revenues or profits for Target as a single entity.
