Wesfarmers announces good sales growth at Coles, Shares higher: Economy Roundup

Wesfarmers has reported a 7.3% rise in first-quarter food and liquor sales at its Coles supermarket chain, with sales increasing by 6.1% on a same-store basis.

The company’s shares increased 6.2% to $28.07 this morning after the sales results were announced. Managing director Ian McLeod said at an investor briefing that customers are still hesitant about rising interest rates and petrol prices.

“Consumer confidence is still a bit fragile,” McLeod said, adding that food and liquor inflation will continue to remain low. He also said the sales results are due to growth in volumes and customer transactions, improved services and better quality foods, and also pointed out a drop in customer complaints.

Sales at Target climbed 4.3% during the first quarter with same-store sales up 1.8%, while same-store sales at Kmart declined by 2.3%.

Meanwhile, Foster’s Group is preparing to transfer the marketing, sales and management rights of 13 of its wine brands into a joint venture with South Australian merchants Vok Beverages as part of a corporate restructure.

“This substantially completes the rationalisation of the Australian wine tail brands announced as part of the Wine Strategic Review outcomes in February,” Foster’s Australia and New Zealand wine managing director David Dearie said in a statement to the ASX.

“This joint venture allows Foster’s to focus on wine making, distribution and marketing of its core portfolio.”

The brands to be transferred are Queen Adelaide, Half Mile Creek, Minchinbury, Matthew Lang, Andrew Garrett, Maglieri of McLaren Vale, Rouge Homme, Great Western, Cartwheel, Fishers Circle, Galway Pipe, Boronia and Yarra Ridge. Foster’s will hold a 50% interest in the venture.

Shares open higher after Wall Street rises

The Australian sharemarket has opened higher today following good results from the US, where higher corporate earnings have continued to push up stocks on Wall Street.

The benchmark S&P/ASX200 index was up 41.5 points or 0.86% to 4854.3 at 12.00 AEST. The Australian dollar also remained steady at US92c.

ANZ shares gained 1.5% to $23.88, while Commonwealth Bank shares also rose 1.9% to $55.60. Westpac rose 2.3% to $27.10, as NAB gained 0.8% to $30.97.

ANZ Banking Group is launching a new brand that will cost $15 million with the company now aiming to reposition itself as a leading regional bank.

“ANZ is increasingly a regional bank operating in 32 countries and speaking 19 different languages, a strong, unified brand across all our geographies is an important part of our future growth,” ANZ chief executive officer Mike Smith said in a statement to the ASX.

“Today, our brand needs to reflect that no matter where our customers deal with us, we want to deliver one high standard of experience, based on understanding their world better than anyone else and working hard to make banking less complicated.”

Woodside announces drop in oil production

Energy company Woodside Petroleum has announced a 5% decline in third-quarter output from a year ago due to lower production numbers from several projects around the company, with revenue falling 40% as a result.

“Relative to the comparable quarter in 2008, production volumes were 5% lower as a result of natural decline in oil production from the Vincent, Stybarrow, Enfield, Neptune and the NWS Oil projects,” Woodside said.

“The lower revenue when comparing third quarter 2009 and third quarter 2008 was a result of reduced sales volumes and lower commodity prices in the current quarter.”

In the US, Wall Street stocks rose as a result of a string of food corporate results, with insurance company Travelers Cos raising its outlook for the financial year. The Dow Jones Industrial Average gained 131.95 points or 1.33% to 10,081.31.

But the news wasn’t all good, with the Labour Department announcing the number of claims for jobless insurance jumped 11,000 to 531,000 last week, despite falling for two consecutive weeks.