Wesfarmers posts $2.7b profit as Coles doubles online customers

Wesfarmers has reported an 18.9 percent net profit increase during the 2014 financial year, partially driven by the strong growth Coles saw after it relaunched its website.

Wesfarmers' investment in its online channels has contributed towards the company's reported earnings for the 2014 financial year.

The company announced it achieved a net profit after tax of AU$2.7 billion, up 18.9 percent from the previous year. It also reported a 13.4 percent improvement on last year's earnings before interest and tax (EBIT) to AU$4.2 billion.

The growth was partially lifted by the company's core retail brand, Coles, which achieved earnings before interest and tax (EBIT) of $1.8 billion, a 9.1 percent growth from last year.

The supermarket giant said it experienced "strong growth" following the relaunch of its website Coles online. In fact, the website acquired nearly more than double the amount of new customers, and saw traffic to the site increase by more than 70 percent in FY14.

The outcome of the relaunched website echoes what Wesfarmers finance director Terry Bowen told ZDNet during the company's third quarter results for 2014 .

"The growth in Coles online was very strong and the strongest in the business," he said at the time.

Wesfarmers also highlighted that the company's loyalty program flybuys continued to be a key driver of Coles' success. During the year, the company increased the use of the data it collects about its customers through flybuys, and was able to provide more "instant offer activation and personalised offers" including delivering more than two million "my weekly specials" emails a week.

During the year, Coles also launched its mobile wallet , which combined its near-field communications contactless payment stick and a smartphone app for iPhone and Android with its existing Coles MasterCard credit card program, and its flybuys program.

The business reported that it continued to see customers respond "favourably" to Officeworks "every channel" strategy, which helped with sales growth achieved online and in its store network.

"An enhanced online platform was launched during the second half of the financial year and annualised sales through the online channel were approximately AU$190 million at the end of the year," the company reported, noting it hopes to continue this momentum during the 2015 financial year.

Earlier this year, Target relaunched its online store , which the company invested AU$10 million into hoping to "deliver a stable and scalable online platform". Despite this, Target's earnings for the year were 36.8 percent below the prior year at AU$86 million.