Wesfarmers (WES) Status Update summary

Strategic Growth and Business Model Evolution

• Sustained sales and earnings growth achieved over the past decade, driven by long-term value creation, resilience, and disciplined cost management across economic cycles.

• Expansion and innovation in product range, digital channels, and store formats have broadened the addressable market to approximately AUD 110 billion across Australia and New Zealand, with ongoing expansion into categories like automotive, pets, energy, and renewables.

• Space optimization and productivity improvements have driven sales and earnings growth well ahead of physical space growth, with a 99% increase in sales versus 27% space growth from FY15 to FY24.

• Investments in technology, data, and digital platforms have enabled personalized customer experiences and omnichannel engagement, with digitally enabled sales now exceeding AUD 1 billion annually.

• Commercial sales now represent 38% of total sales, with ambitions to reach a 50/50 split between commercial and consumer segments, supported by targeted investments in product, service, and loyalty programs.

Category and Product Expansion

• Significant category expansions in pets, cleaning, automotive, smart home, kitchens, plumbing, and electrical have driven strong sales growth and attracted new customer segments.

• New and expanded ranges are curated using data-driven insights, focusing on both consumer and commercial needs, including energy-efficient and renewable solutions.

• Marketplace and own brands portfolio, along with service offers, have grown rapidly, with over 140,000 SKUs online and a focus on curated, high-quality assortments.

• Store network investments include new and replacement stores, format upgrades, and fulfillment centers, with a pipeline of over 100 projects and targeted space growth of 1-2% p.a. over the next five years.

• Space productivity initiatives, such as range consolidation and vertical racking, have unlocked additional sales and improved inventory productivity without expanding store footprints.

Digital, Data, and Retail Media Advancements

• Digital transformation since 2018 has resulted in four websites and four apps, handling over 500 million sessions and 650,000 transactions monthly.

• Data-driven personalization and segmentation have increased customer engagement and average spend, with over 6 million known and contactable customers.

• Generative AI tools, such as Ask Bunnings AI and customer chatbots, have improved online conversion rates and customer support, with plans for broader rollout and enhanced functionality.

• Retail media offering, Hammer Media, leverages omnichannel reach and customer insights, providing a compelling platform for suppliers and advertisers, with expansion across instore, online, and off-site channels.

• Early retail media results are promising, with strong supplier interest and a focus on actionable insights rather than just frequency or eyeballs.