Australia's largest retailer Coles Myer has posted a dramatic 47% slump in profits to A$68.1m (US$35.3m) for the first half of 2001, prompting anticipation of a significant fall in its share price.

Trading conditions at the group's subsidiaries have weakened considerably, Myer Grace is set to post a loss for its full fiscal year, to July 2001, and Coles' Target chain is expected to post a second profit warning shortly.

An accounting firm has been hired to review operations at Myer Grace, Target, and K Mart. Some analysts have suggested that the goods and services tax may be a factor in the profit decline.