Source: Herald Sun

SALES at the Coles supermarket chain, owned by Wesfarmers, rose 6.7 per cent to $31.8 billion in financial 2011 amid declining prices and consumer confidence.

Sales at the retail giant's home improvement and office supplies divisions rose 5.4 per cent to $8.24 billion.

But Target sales fell 1.2 per cent, while Kmart sales rose just 0.4 per cent in the year that was tough for discretionary products.

Wesfarmers chief executive Richard Goyder described the retail divisions' sales performance as solid, given declining consumer confidence, significant price falls and adverse weather.

"A highlight of the result was the continuation of the strong sales momentum in Coles and Bunnings, building on strong results from the previous year," Mr Goyder said in a statement on Thursday. He said Coles food and liquor comparable store sales growth of 6.3 per cent for the year, following 5.0 per cent growth last year, reflected a positive customer response to changes made throughout the business.

But investors sold the stock today, pushing it down as much as four per cent in early trade before it recovered later in the morning.

At 11:28 (AEST), Wesfarmers shares were down 63 cents, or 2.06 per cent, at $29.46.

Excluding the impact of higher tobacco excise, Coles recorded food and liquor price declines for the year of 1.6 per cent.

Price falls at Target constrained sales despite solid underlying transaction growth in "difficult trading conditions".

Target managing director Launa Inman said trading remained inconsistent during the period with sales weakening in June.

"Conditions are expected to continue to be difficult into the first half of the next financial year," she said.

Flat sales at Kmart came as lower prices offset significantly higher volumes, particularly in apparel and home categories, Mr Goyder said.

The apparel and home departments performed "in line with expectations," whereas sales in categories previously driven by promotional activity were "subdued" in comparison, according to Kmart managing director Guy Russo.

Total sales at Bunnings were up 5.7 per cent for the year, following 10.4 per cent growth last year.

Officeworks achieved 4.4 per cent growth in total sales for the year due to strong transaction growth.

Wesfarmers said Coles recorded comparable food and liquor store sales growth of 6.3 per cent while convenience sales at Coles Express rose 8.5 per cent over the year.

It came as the supermarket giant recorded food and liquor price declines of 0.3 per cent in the financial year despite the impact of higher excise on tobacco products and the impact of recent floods on fresh food prices.

Coles managing director Ian McLeod said he was encouraged by the underlying comparable sales growth achieved through increased supermarket transactions and bigger basket spending.

To read the full story, follow this link: www.heraldsun.com.au/news/breaking-news/coles-sales-up-67pc-amid-confidence-fall/story-e6frf7ko-1226103346283