Coles food and liquor sales rise 5.5%: Midday Roundup

Coles has recorded a number of positive results for the first quarter of the year, with total convenience sales rising 17.7%, while food and liquor sales rose 5.5%.

For the quarter ending September 25, sales rose to $8.09 billion, up 8% from the previous corresponding period.

Home improvement sales rose by 8.5%, while office supplies rose only by 0.3%. However, sales were less positive at Target and Kmart, where sales fell by 1.4% and rose just 0.1% respectively.

Managing director Richard Goyder said in a statement he was pleased with the results.

“A highlight of the result was the strong sales momentum in Coles and Bunnings, with both businesses continuing to build on the solid results achieved in 2011,” he said, although noted the poor sales for Target and Kmart.

“Target continued to experience difficult trading conditions with sales negatively affected by ongoing deflation and a high level of promotional activity in the market,” Goyder said.

Target managing director Launa Inman added that “trading conditions were tough… August was the only month with a positive sales outcome and we are seeing the poor sales outcome in September extending into October”.

“In particular, sales of electrical related goods and entertainment categories were well down on the previous year.”

Kmart managing director Guy Russo said apparel and home categories had sold well, but other divisions have suffered.

Shares open 1.5% lower on Wall Street lead

The Australian sharemarket has opened 1.5% lower this morning after a slightly negative lead from the United States overnight, where stocks fell due to fears over the ongoing debt crisis in Europe.

The benchmark S&P/ASX200 index was down 62 points or 1.5% to 4151.5 at 12.00 AEST, while the Australian dollar rose slightly to $US1.02c.

AMP shares fell 1.8% to $4.09, while Commonwealth Bank shares dropped 0.77% to $47.64. Westpac fell 1.88% to $21.44 as NAB lost 1.75% to $24.17.

In the United States, the Dow Jones Industrial Average fell 72 points or 0.6% to 11,504.6.

RBA says Australia not immune to Eurozone debt crisis, but Australian banks better prepared for future crises

The Reserve Bank says while Australia cannot be immune from events in Europe, local have only “limited direct exposures to sovereign debt in the countries that are most at risk” and since the GFC have “done a lot to strengthen their funding positions”.

In a speech by Malcolm Edey, Assistant Governor (Financial System), the RBA says financial regulators around the world made some progress on longer-term regulatory reforms to reduce the risk for future crises, and Australia was “actively represented” in the efforts.

“In broad terms, the various reforms draw on the lessons that emerged from the GFC, and they seek to remedy the weaknesses that became apparent during that period. Hence, among other things, there is a significant effort through the Basel process to increase the amount and quality of capital in the global banking system, and to strengthen liquidity management by banks,” Edey said.

“Although, as I said, we didn’t have a banking crisis here during the GFC period, the Australian regulators recognise the importance of improving standards, and we are working on implementation of the various international initiatives in all these areas, and others.”

Qantas yet to reach agreement with engineers’ union, as PM urges parties to resolve differences

Qantas has reaffirmed its commitment to reaching an agreement with the Australian Licensed Aircraft Engineers Association but is holding firm on its pay offer of 3% over three years, according to media reports.

Meanwhile, Prime Minister Julia Gillard has expressed her concern about the ongoing industrial action, telling the parties to “get around a table and get this fixed”.

Asked whether third parties affected by the dispute should take action, she said: “Third parties do have their own role and rights under the Fair Work system if they want to take them up.”

NAB business confidence survey falls

The NAB business confidence index fell during the third quarter, according to a report on Sky News Business.

The report claims the index fell by nine points to -4, while conditions also fell five points to 03.