Wesfarmers Shines in Asia-Pacific with Coles Acquisition

Diversified industrial company Wesfarmers (WES), which is engaged in processing and distribution of gas, coal mining, building materials, retailing of home and garden improvement products, supermarkets, general merchandise and many other businesses have seen itself becoming the fourth biggest retailer of the Asia-Pacific region during 2009 after it went for the acquisition of Coles Group. It is to be mentioned that the company was the second fastest growing retailer of the world since the year 2003 till June 2009 according to consulting firm Deloitte.

Wesfarmers received a major boost in its growth of compound annual sales after it bought the Coles Group in 2007 for $20 billion. According to Wesfarmers, the acquisition of Coles helped the company to jump eight spots in the ranking in 2009 with its annual sales growth rate hitting 62.7 percent. According to Deloitte, the diversification paid dividends for global retailers in 2009 and the multi-format companies saw faster increase in their sales in comparison with competitors who had single-format.

Wesfarmers managed to obtain the second plank in the grocery duopoly in Australia along with Woolworths, which specialises in food, general merchandise and specialty retailing and managed to boost earnings by adding additional operations in its business including fuel, food and departmental stores. Although Woolworths went four places down to the 26th position in the ranking of the retailers of the globe but managed to defend its third position in the Asia-Pacific region with $49.6 billion worth of sales to June 2009. Wesfarmers and Woolworths are the only two Australian companies available in the list of top 30 global retailers which is mainly dominated by the United States and Europe based giant superstores. Globalisation and superstore format of US based Wal-Mart and France based Carrefour SA helped them to hold the first and second position respectively in the sector.