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Steven Maxwell

BY STEVEN MAXWELL

Monday 14th July 2008, 07:00 Hong Kong

Wesfarmers: Coles needs five years

“Chronic underinvestment” in Coles Group means it will take five years to turnaround struggling retailer, says Wesfarmers chief executive

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Australian retail group Wesfarmers is anticipating that its programme to turnaround the struggling Coles Group could take at least five years, according to Reuters, which quoted the company’s chief executive.

Wesfarmers purchased supermarket operator Coles Group last year for A$18.5bn, the largest such takeover in Australian corporate history.

Speaking to the Australia-Israel Chamber of Commerce today (14 July), Wesfarmers chief executive Richard Goyder said underinvestment in the business meant that the level of change needed at Coles could not be understated.

“It’s an uncomfortable truth that Coles suffered from chronic underinvestment in its stores and customer service in an effort to drive profit in what we believe was an unsustainable way,” he said.

“We expect it to take five years to deliver the substantial transformation required,” Mr Goyder added.

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