Wesfarmers' first half profit has plunged 87 per cent to A$212 million ($227m) amid deepening woes at its troubled Bunnings UK business and Target department stores.

The result was largely due to impairments against the two businesses of more than A$1.3 billion, with Bunnings UK and Ireland accounting for A$1.023 billion and Target A$306m.

The hardware business reported a loss of A$165m in the first six months of the year, compared with a loss of A$48m in the prior corresponding period, with sales down 15.5 per cent. Target's sales fell 6.5 per cent.

"The loss for the half reflected continued trading and execution challenges as a result of the rapid repositioning of Homebase following the acquisition," Wesfarmers managing director Rob Scott said in a statement.

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"The management team has been strengthened and a review is underway to identify the actions required to improve shareholder returns."

Excluding significant items, Wesfarmers' profit was still down 2.7 per cent to A$1.535b, with Coles profit falling 14.1 per cent to A$790m as comparable food and liquor sales growth dropped to 0.9 per cent, down from 1.3 per cent.

"Coles maintained good sales momentum during the half, with transaction growth accelerating in the second quarter and reaching the highest level of quarterly comparable transaction growth in six quarters," Scott said.

"The business continued to improve its customer offer across value, quality, product innovation and service, resulting in overall improvements in customer satisfaction metrics."

Profit for the overall department stores segment was up 7.2 per cent to A$415m, with Kmart sales up 5.4 per cent. "Kmart invested significantly in the customer offer during the half, delivering greater value for customers and driving continued growth in volumes," Scott said.

"Target stabilised its earnings through productivity initiatives and improved trading margins, while continuing to reposition its merchandise offer. Good capital disciplines resulted in a strong cash result for the department stores division."

Wesfarmers will pay a fully-franked interim dividend of $1.03 per share.