Retail Stocks

[Fiordland Moose]

According to data released today by the Australian Bureau of Statistics (ABS), retail sales volumes in Australia declined 0.5% in the June quarter of 2023, the third consecutive quarterly fall.
It comes after a 0.8% fall in the March quarter of 2023 and a 0.4% drop in the December quarter of 2022.

According to Ben Dorber, ABS's head of retail statistics, the drop in retail sales volumes demonstrates the extent to which consumers have cut back on spending in response to cost-of-living challenges.

"It's the first time since 2008 that retail sales volumes have recorded three consecutive quarterly falls", he said.
"Retail sales volumes are down 1.4% compared to the June quarter last year. Outside of the pandemic period, this is the first time since 1991 that sales volumes have fallen compared to the previous year."

However, clothing sales volumes are up, while prices are down.  Make of that what you will

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re the bolded line there was actually deflation in clothing & apparel prices in Australia for the quarter (both YoY and % SA change from previous quarter). Part of that due to higher than normal EOFY promotional activity (higher discounts mean lower net ASPs) and a more difficult sell through of winter orientated stock....think jackets, blazers, etc (its warmer winter). Those typically carry higher ASPs and there is a mix effect as less of those are sold, and then discounted to clear. Probably more purchases made with northern hemisphere travel made in mind canabilising winter purchases - lower average sales prices and mix effect. Hard to say how much is extra discounting and how much is mix - but regardless the cause deflation is not something a retailer wants.

[winner (n)]

Hey Fiordland Moose

You should update the chart showing Oz retail clothing sales volumes this century and see if volumes have reverted back to trend yet

Your did say chart must mean something when you posted it ...seems it did

Screen shot file too large to post

[Fiordland Moose]

She is still running pretty hot, W69.

Clothing, footwear, & accessories volumes for the June quarter were 23.1% above the 20 year pre covid trend, and below the 12 month to June weighted average of 24% above trend (peaked at 27.2% in September).

Another relevant measure is volumes per capita, given population growth. On that basis, 18.3% above trend, and compares to 20.3% over the last 12 months to June. That's clocked down each quarter since the September quarter, which was the peak quarter (from a seasonally adjusted POV), 23.7% > 19.5% > 18.35% > 18.29%.  I expect a more meaningful contraction and closing the gap to trend across the coming quarters & persisting over the next ~18-24 months. Clothing volumes & spend per capita useful bellwethers in evaluating the RBA cash rate as well - been a handy guide that has served me well on the FX front. Suggests more tightening may be required, although I think we'll see bigger quarterly falls in months to December based on some freight forwarding ordering intention data coming from the AU retail market that I've seen.

You can splice the data down further - shoes vs clothing, men vs women, etc. Won't be surprising to most that clothing has held up better than shoes.

[winner (n)]

Thanks FM ...is interesting and agreegives insight into the future (in Oz)

[Waltzing]

AUS future GDP growth +/- will surely be the factor that determines the overall direction of Kanga land...

[KW]

Pet Central, a chain of pet stores in the Sth Island has gone into liquidation
https://www.chrislynchmedia.com/news-items/staff-left-angry-and-upset-after-pet-central-stores-go-into-liquidation

That leaves Animates (Ebos) and Pet Stock (privately owned) in the market, along with the two online companies PetDirect and Pet.co.nz

Just another example of the lack of competition in a small market.  

[Shareguy]

Top catch a large fishing retail chain has also just gone into liquidation. Retail not a good place to be at the moment it seems.

[winner (n)]

Top catch a large fishing retail chain has also just gone into liquidation. Retail not a good place to be at the moment it seems.

Where you going to get your next rod and stuff now?

[Shareguy]

Where you going to get your next rod and stuff now?

Not sure. There is plenty of people in this space. Plus very easy to buy on line. My cousin buys 2 times a year from China, heaps cheaper.

[Waltzing]

There was a great little trout fly fishing shop called the Red Spinner or something like that at the bottom of Hatepe Hill run by Bruno.. an EX MI6 spy who was whisked out of Hong Kong and hidden in lake taupo... wonderr how many other spy's were sent down under ....

Retail not what it was in the golden era of the late 70's...

[Waltzing]

Yes chatted to Farmers today across the long drive way fence and they were shocked at the price drop...

Could this effect BRIS and other retailers in towns? Wonder what the total drop in retail spending will be from this...

https://www.stuff.co.nz/business/farming/opinion/300945203/dairy-farmers-slam-their-wallets-shut-after-fonterra-announced-the-farmgate-milk-price-drop

[winner (n)]

Oz retail still might struggle.

ANZ-Roy Morgan Consumer Confidence slipped 3.4pts to 75 this week, fully erasing the gains of last week. The index has now spent a record 23 straight weeks below the mark of 80 – beating the all-time record of five months (22 weeks) from September 1990 – January 1991 when the index was conducted on a monthly basis.

Consumer Confidence is now 5.3pts below the same week a year ago, August 1-7, 2022 (80.3) and 3.2pts below the 2023 weekly average of 78.2. Looking around the states, Consumer Confidence was down in all five mainland states this week.

Driving the index down this week were decreases in sentiment regarding personal finances both compared to a year ago and expectations over the next year. A record high majority of 57% of respondents said they are 'worse off financially' than this time last year.

[Waltzing]

Excellent reporting Winner()!

will Barbie sales be the only item in the pink this northern summer?

Margot Robbie and Barbie must in line for some awards surely... best ... ahhh... dressed award!!!! Is there one at the oscar for that?

[Waltzing]

KMD 89 and HLG under 6.....

maybe the market isnt completely convinced spring will bring good news on the GDP front... oh yes forgot the farm gate is now firmly shut and the camp fires are burning in the valleys..

so much for 7 winner()....

[Shareguy]

A retail tenant in a mall in Auckland has just vacated after 15 years in clothing retail.

He said retail here is just too hard and made the following comments.

1/ Outgoings are rising every year beyond any growth in sales. His insurance alone was up 32 percent just this year.
2/ Shop lifting is at epidemic proportions and has got dramatically worse last few years. He and his staff have been assaulted on numerous occasions. His wife had broken bones to show for it after telling a shoplifter to put the items back. In most cases the police are not interested. In fact made the comment that most retailers don't even ring the police as they are not interested unless over $500. Even then very unusual for them to show up. Shoplifters are aware of the law and simply stuff things in bags in view of the shop keeper and walk out the door.
3/ Police used to have regular community patrols in the town centre. Not these days. Mall security are powerless and reluctant to do anything.
4/ People are more prone to violence if challenged. Many seem to carry knifes.
5/ A number of shop lifters are under age and even If caught are back in the shop the next day laughing and threatening the shop keepers.
6/ Alcohol and Vape shops seem to be doing well. 4 vape shops in his mall alone.
7/ Can't compete with online shops. Try things on in his shop and then buy online from others.

I'm sure there will be plenty of other retailers with the same issues.  Very sad indeed.