Wesfarmers, Australia’s second-largest retailer, has revealed that Coles’ food and liquor sales rose 5.2% in the three months to the end of March.
The company said the increase in sales meant that Coles had stopped its market share falling. For the last three years, Coles had been losing consumers to larger rival Woolworths, which used lower costs to reduce prices.
“We think we’ve arrested the market share decline in the business,” CEO Richard Goyder told investors and analysts on a conference call. “We’re stopping the fall.”
Wesfarmers, which bought Coles in July, said the integration of the business was “largely complete”. The new owners have cut 263 jobs since taking control in November. Another 750 job cuts are planned before the end of June.
Wesfarmers, meanwhile, plans to issue A$2.5bn (US$2.4bn) in new shares to repay debt after costs to refinance debt incurred by the acquisition of Coles surged by more than a fifth.
Current investors have been given the option to buy one new share at A$29 for every eight they own – a 22% discount on Wesfarmers’ last traded price.