Wesfarmers’ hefty businesses proved their resilience in the pandemic. Now, with Wesfarmers shares breaking $65 for the first time, Rob Scott needs us to think about growth.
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Wesfarmers enters this growth battle with two aces up its sleeve. The first is that its primary growth engines are its two big profit engines – Bunnings and Kmart – and Wesfarmers’ track record with both makes their near and medium-term growth story entirely believable. The second is that it has a stellar track record of managing its portfolio and creating value for shareholders.
Wesfarmers is investing heavily now, buying some and growing others, but the market isn’t sure there are the Bunnings or Kmart-style riches at the end of the rainbow. So he doesn’t. There were stacks of numbers about OnePass in Thursday’s presentation, but not the one that could definitively show whether it was gaining traction: paying subscribers.
The other piece of Wesfarmers’ digital business is Catch, which Wesfarmers has struggled with since it bought in 2019. Wesfarmers shrunk Catch’s first-party product range by 70 per cent and cut 50 per cent of jobs last half, to try to get it back on track. Scott agrees Wesfarmers’ health is much closer to the beginning of its journey than the end. “I’ll judge its success over the next three to five years,” he says.
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