Wesfarmers is intensifying its integration of artificial intelligence across its retail operations as part of a broader push to improve productivity amid challenging economic conditions. The conglomerate’s chief executive, Rob Scott, highlighted the growing role of AI in enhancing customer engagement and driving sales during the company’s annual results announcement on Thursday.

Wesfarmers has deployed AI-powered tools such as a chatbot, nicknamed “Buddy,” at its Bunnings stores, which has fielded over 350,000 customer inquiries offering DIY advice. The company is also utilizing autonomous agents in Kmart to streamline sourcing, supply chain management, and store functions. Scott noted these technologies have significantly boosted conversion rates—two to three times higher than before—and increased average order values by 20 to 40 percent across key brands including Bunnings, Kmart, and Officeworks.

The embrace of AI is part of Wesfarmers’ response to a subdued economic environment marked by rising input costs and constrained consumer spending. Scott emphasized that the current public policy landscape, including government measures targeting demand through restrictions on negative gearing and capital gains tax, has not alleviated the core issue in the housing market, which lies in supply shortages. He stressed the complexity of addressing housing affordability requires coordinated efforts across local, state, and federal governments, innovative construction methods, and suitable tax policies.

Wesfarmers has taken steps toward addressing housing supply through a joint venture with the Built Group to create Bulit Living, a residential apartment development company supported by the federal National Reconstruction Fund. This initiative aligns with efforts by New South Wales and Western Australian governments to reduce regulatory barriers to housing construction.

For the 2026 financial year, Wesfarmers reported total sales of A$47.2 billion, a 3.4 percent increase from the prior year. Net profit declined 1.8 percent to A$2.87 billion, but excluding significant items—such as a A$279 million gain from the sale of Coregas and property transactions—underlying net profit rose 8.3 percent. The company declared a final dividend of A$1.20 per share, up from A$1.11, payable on October 7. Despite these results, Wesfarmers shares closed down 4.6 percent at A$79.47.

Bunnings continued to deliver strong performance, with revenue up 4.1 percent to A$20.4 billion and earnings rising 5.1 percent to A$2.46 billion. Growth was seen across consumer and commercial sectors as well as multiple product categories, driven by home improvement and lifestyle offerings. Scott also noted that an AI-based internal chatbot has saved approximately 500,000 staff hours by reducing administrative burdens, enabling employees to focus more on customer service. Bunnings managing director Michael Schneider has announced plans to retire early next year, with chief customer officer Rachael McVitty set to succeed him.

Kmart Group, which includes Target, posted a 2.8 percent increase in revenue to A$11.75 billion and a 6 percent rise in earnings to A$1.1 billion. The group sustained its strong value positioning by lowering prices on over 2,500 items, fueling growth in customer visits and transaction volumes.

Officeworks experienced a 3.7 percent rise in sales to A$3.7 billion, though earnings fell sharply by 20.3 percent to A$184 million amid ongoing restructuring and job cuts. Meanwhile, Wesfarmers Health, which comprises Priceline pharmacies and related services, reported a 9.1 percent sales increase to A$6.474 billion and an 18.8 percent rise in earnings to A$76 million, supported by network expansion and competitive pricing.

Looking ahead, Wesfarmers indicated that early indicators for the 2027 financial year are mixed. Bunnings’ sales growth in the first seven weeks outpaced the latter half of 2026, aided by dry weather conditions in July, while Kmart’s sales growth remained steady. Officeworks continued to grow but at a slower pace than in late 2026. The company cited ongoing uncertainty around inflation, housing market conditions, interest rates, and tax policies as key factors influencing consumer confidence and business sentiment.