WESFARMERS boss Richard Goyder is yet to notice a change in fragile consumer sentiment, but says he understands shoppers' caution at a time when their superannuation savings have shrunk and the value of their homes has fallen.
Mr Goyder said retailers such as Wesfarmers, which owns supermarket group Coles as well as hardware giant Bunnings and apparel stores Target and Kmart, needed to work harder in the challenging trading environment to attract customers by offering better value for money.
Speaking yesterday after the release of Wesfarmers' full-year sales, he warned he had not seen a shift in consumer confidence since the beginning of the year and was not expecting any improvement in the near term.
"I don't think we have seen much change in the external environment over the last six months," he said.
"I don't think there has been much change whatsoever. Our base line would be that things will tick along as they are now."
Wesfarmers said its flagship Coles chain had lifted total full-year sales by 6.1 per cent to $33.7 billion, as food and liquor sales rose 4.6 per cent to $26.18 billion. Comparable full-year food and liquor sales were 3.7 per cent higher, while for the fourth quarter same-store sales rose 3 per cent to $6.5 billion beating larger rival Woolworths for the 12th straight quarter.
But the downbeat state of the average shopper remains a bugbear for retailers and is causing disquiet among policymakers.
A succession of interest rate cuts this year (and four rate cuts since November), as well as billions of dollars in new investment triggered by the mining boom, still had not been enough to change their behaviour.
"I understand why people are being cautious," Mr Goyder said, "because I think, if you step back, we have been through a period in the global financial crisis where, and subsequently, you have had asset values fall, businesses tighten up on a whole bunch of things, house prices over time that declined a bit and superannuation funds where equities have come back.
"I do share with others the view that the Australian economy is in relatively great shape and I'd rather be doing business in Australia than most other places in the world at the moment."
The conglomerate's merchandise chains, Target and Kmart, were flat to slightly negative for the year, but in the fourth quarter the government's household assistance package and an early toy sale helped lift sales at Target by 2 per cent, to $915 million, with Kmart's sales 2.2 per cent better at $927 million.
On a comparable-store sales basis, Target's sales rose by 4.5 per cent and Kmart was 2.1 per cent better.
At its hardware juggernaut Bunnings, full-year sales hit $7.15 billion, up 5.6 per cent, with quarterly sales 4.1 per cent higher at $1.62 billion. Comparable-store sales growth for the quarter was 2.9 per cent.
Wesfarmers will release its full-year profit result next month.
Shares in Wesfarmers rose 27?, or 0.8 per cent, to close at $32.25.