The managing director of Wesfarmers, Richard Goyder, has denied claims that earnings at its supermarkets and bottle shops have gone backwards this year, or that internal targets for the turnaround of Coles have been derailed by the retail slowdown.

He warned that trading in the retail sector would be "patchy" in coming months as non-food chains faced a "tougher environment" with discretionary spending under pressure.

Delivering Wesfarmers's first full-year profit result since the company's acquisition of Coles in November, Mr Goyder sought to dampen expectations for a speedy change of fortunes.

Wesfarmers bought Coles at the peak of the retail cycle, and paid top dollar, mostly using its own shares to fund the $18 billion purchase but also borrowing heavily.

When combined with Bunnings, 750 Coles supermarkets, a pair of discount department stores and a "big box" office supplier make up 60 per cent of Wesfarmers's earnings.

Mr Goyder said he stood by his plans to make a good return on investment in Coles and was heartened by the fact its market share in terms of supermarket sales had already "moved up a tick" since last year.

But the Merrill Lynch retail analyst David Errington said his calculations showed earnings in the food and liquor division - which makes up 30 per cent of retail earnings at Wesfarmers - were down in the second half of 2007-08 compared with the previous year.

"Compared to what Coles did in the second half, it has gone backwards and gone backwards a very long way," he said.

Mr Goyder denied this.

Most analysts agreed the food and liquor division earnings came in well below estimates, and that profit margins were lower than expected.

Fourth-quarter sales at Coles supermarkets and bottle shops grew 2.4 per cent on the previous final quarter, compared with 4.9 per cent for Woolworths.

Mr Goyder said he was "not unhappy" with the sales figures because they proved "the gap is not widening".

In the seven months Wesfarmers has owned Coles, its supermarket and bottle shop sales have grown 2.8 per cent, against 6.3 per cent at Woolworths.