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Wesfarmers online sales ramp up in 1H22 while COVID-19 kept stores shut

During the half-year, Wesfarmers also continued to build out its data and digital ecosystem.
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Written by Aimee Chanthadavong on

Wesfarmers managing director Rob Scott has described the first half of the 2022 financial year as the "most disrupted period" for the company since the onset of COVID-19, due to extended government-mandated store closures and trading restrictions in Australia and New Zealand.

On Thursday, the retail giant group reported net profit after tax dipped by 14% from AU$1.41 billion to AU$1.21 billion for the half year. Earnings before interest and tax came also came in 12% lower at AU$1.9 billion.

Revenue remained stable at AU$17.7 billion, which was partly underpinned by the 37.5% uplift in online sales across the group to AU$1.9 billion, excluding Catch. Including Catch, this amounted to AU$2.5 billion.

Of the online sales total, Kmart Group, which includes Kmart, Target, and Catch marketplace, contributed AU$1.4 billion, following a 22% year-on-year increase.

According to Scott, Wesfarmers increased its investment in digital capabilities during the period, particularly in building out its data and digital ecosystem, which helped support the increase in online sales across its retail business.

"This included investment in the shared data asset and scalable customer data architecture as well as the continued development of capabilities within the advanced analytics centre, specialist technical expertise, and robust data governance," he said.

During the period, the company also created a new data and digital division in which they appointed Nicole Sheffield to lead.

While reporting for the data and digital division remains as part of corporate for FY22, the company said this will be separated from FY23.

In line with previous guidance, operating expenditure associated with the group's data and digital ecosystem is expected to be approximately AU$100 million during the 2022 financial year, the company said.

"As a result of progress in recent years to develop deeper customer relationships, stronger digital engagement and expanded ranges of everyday products, the group's retail businesses are well-positioned to manage the transition as COVID-related restrictions are eased," the company said.

"The group's retail businesses will maintain their focus on meeting changing customer needs and delivering even greater value, quality and convenience for customers. Investment in divisional digital capabilities will continue and is expected to support enhancements to customer value propositions, expansion of addressable markets and delivery of operating efficiencies."

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