Wesfarmers
(ASX: WES) has announced what the trading restrictions in Victoria mean for its operating businesses.
If you didn’t know, Wesfarmers is the business that operates Bunnings, Officeworks, Kmart, Target and Catch.
Wesfarmers tells investors about the COVID-19 restrictions
Victoria has entered into a six-week stage 4 lockdown which has shut most retail stores in Melbourne.
Wesfarmers said all of its retail businesses will be able to continue online operations through home delivery and contactless click and collect options.
Bunnings will remain open for trade customers but it will be closed for in-store retail customers.
Kmart and Target stores in Melbourne will be shut for in-store customers. However, Officeworks can service business customers but it will be closed for in-store retail customers.
Wesfarmers also operates non-retail businesses. Blackwoods, Workwear Group, Coregas, Australian Vinyls and Modwood are expected to continue to operate with COVID safe guidelines.
How will this affect Wesfarmers?
Wesfarmers said that in FY20, approximately 17% of retail sales came from stores in metro Melbourne. In Melbourne there are 53 Bunnings, 39 Kmarts, 34 Targets and 42 Officeworks that are probably affected by these new rules.
Considering the lockdown is for six weeks and there are online as well as click and collect options, I don’t think it will limit Wesfarmers that much.
However, I think there’s a bigger question of whether Wesfarmers has already seen the big demand for its products during the first national lockdown. I’d guess that many people have already bought their home office equipment and have already done the DIY projects.
Wesfarmers is a great business, but at a share price of around $46 I think it’s priced highly. Other ASX dividend shares and ASX growth shares could be better picks today.
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