Retail Stocks

[Basil]

It is to be fully expected that people will pull back from "nice to have" but completely unnecessary things in tougher economic times.  This is not rocket science, people shift to more value brands in tougher times.  Red sheds at WHS are doing well, a classic case in point.  If I owned a bunch of retail stocks, I would be concerned how well MHJ, (chart looking sick) will hold up in tougher times.
Fancy jewelry is something I think has a very strong discretionary element to it.

[winner (n)]

Get your old sowing machines out and start peddling ...

https://www.stuff.co.nz/business/132237943/never-been-a-downturn-like-this-businesses-battle-costofliving-crunch

Just media making a mountain out of a molehill

Most punters still spending as much if not more than previous ...don't see Stuff writing about that eh waltz

[Waltzing]

Go get those STATS Winner() !!!

Gosh could be some real bargain on the market this year... maybe its now..

[Waltzing]

what does a recession look like then....

https://www.stuff.co.nz/business/132261497/banks-split-on-whether-nz-recession-will-be-confirmed-on-thursday

 and is immigration powering up 2024...

https://www.stuff.co.nz/business/opinion-analysis/300899146/the-property-market-is-about-to-pick-up-steam--but-dont-jump-in-right-away

[Fiordland Moose]

https://www.afr.com/markets/equity-markets/investors-flee-consumer-stocks-as-economy-slows-20230608-p5df5l

Fund managers are convinced the Reserve Bank's grip on a soft landing is slipping, triggering a scramble out of stocks linked to consumer spending, and mounting a challenge to its objective of keeping the economy on an "even keel".

Evidence of the slowdown can be seen in how hard retailers are discounting and the fact they're bringing forward end-of-financial-year sales," said Chris Prunty, from hedge fund QVG, at the sidelines of the Morgan Stanley Australia Summit. "Feedback from companies suggests the consumer hit the wall some time in April or May. Anything in apparel is ground zero but all discretionary categories are likely to be impacted."

"There have been half a dozen downgrades, but there will probably be more," said David Moberley from ClearLife Capital. "It's really the younger demographic that has really been impacted by cost inflation – rents and utilities," he said. "At this stage people are spending on travel but at the expense of apparel."
It's not just mortgage holders who are feeling the pinch: young people have become a flash point for sharemarket bears, as students and youth customers are crunched by rising rents and higher education loans.

Good article - a few others below.

Nice to know that I am now looking less fringe - with company financials and MSM now reporting on things I've been saying for a while.


https://www.afr.com/markets/equity-markets/wilson-s-says-avoid-retail-stocks-amid-goods-spending-recession-20230530-p5dcc2
https://www.afr.com/work-and-careers/workplace/minimum-wage-rise-will-push-up-prices-put-jobs-at-risk-gerry-harvey-20230604-p5ddsc
https://www.afr.com/policy/economy/the-rba-is-taking-australia-to-a-precipice-20230528-p5dbug
https://www.afr.com/companies/retail/consumer-crunch-flattens-adairs-20230602-p5dde8

[Waltzing]

Perma Bears!!!!!

The sun will come up again!!

The recent burst in retail shows what people really want to DO!!!!

They wanr ro SHOP... they have a list of things they want and WAIT THERE IS MORE..

They have a list with  MORE on it...

It may take a year or two to emerge from the retail winter but when they do it will be like TRAVEL.

Travel stocks are recovering and you will soon feel very frustrated at hearing nothing but bad news.

Next april you will be rebelling!!!

These people are negative on LIFE!!

Rage against the RAIN!!!!

[winner (n)]

This century (at least) an annual basis total retail sales in NZ have never declined ...never been less than pcp .....never gone backwards (in nominal terms)

[winner (n)]

Stats NZ Electronic Card Spend for month of May out today

Total Retail (exc services) +3.3% v pcp / Core Retail (exc fuel / mv) +5.2%

Durables (non food and consumables) +0.9% and Apparel -3.9%

Durables and Apparel trends interesting. Listed retailers in this group.

Trends below - I'd read it as that Durables growth will remain flat / soften a bit until reached the pre-covid trend line. Apparel been quite buoyant of late but now weakening and possibly will drop back to the pre-covid trend line over the course of the next 12 months

You cannot view this attachment.

[Basil]

Hardly the big collapse in spending on apparel some have been predicting.

[Waltzing]

Probably bought a lot of  RAIN COATS as it was the wettie summer in History...

Umbrella's... ect... other wise you need less clothes in summer...

[winner (n)]

Market didn't seem to like those Stats retail data today

Briscoes down 2.3% and 52 week low

Warehouse down 2.4% and just above 52 week low

HLG down 2.2% and below 6 bucks

Kathmandu / MHJ global focus but still in doldrums....as is RBD to a certain extent.

But it'll all be OK later in week with a +ve GDP number and no recession

[Waltzing]

Just the after shock but dont worry the GOVT Blow out Budget will hold GDP up... IRD  Company Tax receipts are down.

Biggest trade deficit in current history...

[Basil]

Chloe will save us with her visionary tax policies that will stimulate vast growth in the economy.  

[Basil]

Market didn't seem to like those Stats retail data today
But it'll all be OK later in week with a +ve GDP number and no recession

Probably your dry sense of humour that I've come to appreciate.
Based on what I have seen in recent times and feedback from the coalface with clients there is very little doubt in my mind we have been in a recession since the beginning of Q4 in 2022. I have been investing on that basis and will be surprised and pleased if I'm wrong if we somehow squeezed some extremely modest growth out of this sour puss economy in Q1 2023... but I genuinely feel we are ~ 8.5 months into this since 1 October and probably a similar or slightly longer period to go.  My best guess is we're about 40-45% of the way through this recession.

[Ferg]

Based on what I have seen in recent times and feedback from the coalface with clients there is very little doubt in my mind we have been in a recession since the beginning of Q4 in 2022. [snip]  My best guess is we're about 40-45% of the way through this recession.

I'm not seeing it yet.  Some of us predicted no recession per your 2023 prediction thread (which we should reprise) - we all hope that prediction is correct.  My anecdotes: larger clients who are upstream of retail are still showing year on year revenue growth with limited or no significant impact on margins.  Smaller clients are a mixed bag with some services showing growth, while 2 property sub-sectors have anecdotally collapsed (being architecture and interior design which have a greater exposure to the rest of NZ).  That does not bode well for some property sub-sectors in the short term.  Hawkes Bay may be slightly insulated from a recession given the post-Cyclone rebuild hence the reason I'm not seeing it.....yet.