Retail Stocks

[winner69]

Interesting comment from Shopify

Like many in the retail industry globally, Lütke saw the pandemic as a transformative event, spurring digital transformation that would forever change the way people shopped.

It turns out to have been more of a passing phase, with consumers returning to bricks and mortar retail stores to shop largely as they did before the pandemic.

Some other interesting insights in the article

Online is no longer a gold mine

https://businessdesk.co.nz/article/opinion/online-is-no-longer-a-goldmine

…but it’s day will come

[LaserEyeKiwi]

So the first of the Helicopter payments arrives on Monday - any ideas on who might benefit the most?

[winner69]

So the first of the Helicopter payments arrives on Monday - any ideas on who might benefit the most?

Booze and takeaways probably and what’s left the Red Sheds

[sb9]

Booze and takeaways probably and what’s left the Red Sheds

Don't forget a visit to sin city too for a gamble..

[winner69]

Bit tough Jobseekers don’t get it

[LaserEyeKiwi]

Bit tough Jobseekers don’t get it

Jobseekers get the “Winter Energy Payment” which is an extra $20.46 a week for 5 months, which works out at a bit more than the Cost of Living payment.

[Waltzing]

"Booze and takeaways probably and what’s left the Red Sheds"

Classic !!!!!!!!!!!!!!!!!!!!!!!!!

https://www.youtube.com/watch?v=uCGD9dT12C0

[LaserEyeKiwi]

Weekly Update:

(will change this up a bit next week)

14021

[winner69]

How Aussie consumers feel post pandemic


https://www.mckinsey.com/au/our-insights/emerging-cautiously-australian-consumers-in-2022?cid=eml-web

[Waltzing]

No No no ... this is the real Aussi experiance after anything ... lets get real....

https://www.youtube.com/watch?v=gGxBKQzsEZ4

[LaserEyeKiwi]

Briscoes reports y-o-y growth for 2nd quarter ending July 31st, forecasts NPAT growth for full year.

https://www.nzx.com/announcements/396397

[winner69]

Briscoes reports y-o-y growth for 2nd quarter ending July 31st, forecasts NPAT growth for full year.

https://www.nzx.com/announcements/396397

Yep, sales up 3.5% on pcp (probabaly selling less things) but margins down so NPAT down about $2m

I hate it when a company says they'll make up any first half shortfall in the second half ... generally doesn't happen so just as well Rod is a guru and in Briscoes case it will happen

[winner69]

A few insights in this article about Aussie retail


"Some people will be pulling back [on spending] while others are still spending like crazy, but on average people are spending like crazy," he says. ..... but 2023 might not be as good


https://www.morningstar.com.au/credit/article/are-the-glory-days-over-for-the-retail-sector/225675?utm_campaign=Morning%20Note%20Free%20Email% 2020220805&utm_medium=email&utm_source=Email%20Campaign

[LaserEyeKiwi]

Weekly review:

14041


Shipping rates continue to plummet:
14042


NZ petrol prices also falling:
1404314043

[winner69]

Card Spend July

Retail card spending down 0.2 percent in July

https://www.stats.govt.nz/news/retail-card-spending-down-0-2-percent-in-july/

That's seasonally adjusted

v last year Total down 0.5% / Core Retail down 0.9% / Durables down 4.0%

Durables probably most relevant for listed retail - so down 4.0% not too good

Core Retail value down 0.9% but number of transactions down 8.8% gives some idea of volume and inflation impacts

[LaserEyeKiwi]

Card Spend July

Retail card spending down 0.2 percent in July

https://www.stats.govt.nz/news/retail-card-spending-down-0-2-percent-in-july/

That's seasonally adjusted

v last year Total down 0.5% / Core Retail down 0.9% / Durables down 4.0%

Durables probably most relevant for listed retail - so down 4.0% not too good

Core Retail value down 0.9% but number of transactions down 8.8% gives some idea of volume and inflation impacts

I’m very confused by the Fuel spending being down dramatically year on year when fuel prices are significantly higher than they were a year ago….? That would imply transport movement is down dramatically.

[Muse]

I’m very confused by the Fuel spending being down dramatically year on year when fuel prices are significantly higher than they were a year ago….? That would imply transport movement is down dramatically.

fuel consumption is up year on year 6.4%, in actual dollars.
fuel consumption is down 6.1% on a SA basis relative to june. or down 2% in unadjusted raw dollar terms.

prices have fallen since june.

this page has slightly more detail. plus you can just click on the excel files to see everything for yourself. always a bit confusing what stats nz are refering to sometime (movement on prior year, movement on prior month on a SA basis, etc etc)
https://www.stats.govt.nz/information-releases/electronic-card-transactions-july-2022/

but on the traffic point - the latest anz traffic index was sluggish.

[winner69]

I’m very confused by the Fuel spending being down dramatically year on year when fuel prices are significantly higher than they were a year ago….? That would imply transport movement is down dramatically.

Fuel spending in July this year was UP 6.4% on last year

They mentioned fuel prices fell in 2nd half of July .... probably why +6% in JUly is lower than +14% in June

[LaserEyeKiwi]

Cheers lads - had missed that chart title - the world makes sense again.

[LaserEyeKiwi]

I do know a lot of people who took overseas holidays over the alst 6 weeks (Aussie, Fiji, Raro & Hawaii specifically), I wonder if all those delayed holiday trips are now biting into local retail spending in terms of discretionary spend. Hard to tell if that would be a long lasting effect or just a temporary blip if so.

[bull....]

Card Spend July

Retail card spending down 0.2 percent in July

https://www.stats.govt.nz/news/retail-card-spending-down-0-2-percent-in-july/

That's seasonally adjusted

v last year Total down 0.5% / Core Retail down 0.9% / Durables down 4.0%

Durables probably most relevant for listed retail - so down 4.0% not too good

Core Retail value down 0.9% but number of transactions down 8.8% gives some idea of volume and inflation impacts

yep not too good a report
transaction numbers down 9% odd
value of transactions not as bad down marginally only because of retailers raising prices

So makes sense retail stocks not performing in light of this data.
wait till later this yr / next yr expecting worse data as mtge roll off's begin

[winner69]

I do know a lot of people who took overseas holidays over the alst 6 weeks (Aussie, Fiji, Raro & Hawaii specifically), I wonder if all those delayed holiday trips are now biting into local retail spending in terms of discretionary spend. Hard to tell if that would be a long lasting effect or just a temporary blip if so.

But aren’t zillions of foreigners now coming to NZ to spend big bucks

[LaserEyeKiwi]

But aren’t zillions of foreigners now coming to NZ to spend big bucks

The bulk of inbound tourism bookings are being made for the upcoming summer - so besides Australians flocking to Queenstown, the tourism wave hasn’t hit yet.

[LaserEyeKiwi]

Weekly Update:

14060

International shipping rates continue to plummet, now far lower than they were a year ago:

14061

Local Petrol prices also continue to plummet

[LaserEyeKiwi]

Weekly update:

14072

==========

International shipping rates continue to plummet:

14073

==========

Local Petrol prices continue to retreat:

14074

==========

Fixed mortgage rates continue to sit below recent highs:

14075

[Old mate]

Thanks LEK love your work. Fuel and shipping well down could we be seeing interest rate peaks now or soon?

[bull....]

freightways noticing the slowdown starting in there commentary

[alokdhir]

freightways noticing the slowdown starting in there commentary

What u think after OCR raised from 0.25 to 3.00 % would have happened ? Its elementary Mr Bull when rates go up slow downs occur and then inflation is tamed

All commodities index are down including your famous oil in anticipation of slowdown as all banks are raising rates so that most feared Inflation is controlled

U cant have your Cake and eat it too

[bull....]

What u think after OCR raised from 0.25 to 3.00 % would have happened ? Its elementary Mr Bull when rates go up slow downs occur and then inflation is tamed

All commodities index are down including your famous oil in anticipation of slowdown as all banks are raising rates so that most feared Inflation is controlled

U cant have your Cake and eat it too


inflation not just made up off oil and commodities coming down and growth slowing some

[LaserEyeKiwi]

Well this is rather interesting for Aus/NZ retail sales

Owner of Westfield malls reports uplift in spending at its properties in first half, particularly for fashion & jewellery retailers.

https://www.businessnewsaustralia.com/articles/scentre-group-rides-the-retail-boom-as-shoppers-splash-an-extra--800m-over-six-months.html

”“In the six-month period to 30 June 2022, our business partners achieved over $12.0 billion of sales, $800 million more than the first half of 2021 and $500 million more than the first half of 2019, pre- pandemic.”

some excellent info here:

NZ just above flat / Australia is the one growing. (They have 4 of the 5 largest malls in NZ, and 37 Australian malls)

14084

Fashion and Jewellery doing very well (good for HLG, KMD & MHJ)

14085

[Waltzing]

HLG looking interesting LEK.

starting to form a little base here waiting on news...

still a very high DIV here that the market doesnt believe in.

The whole bling ringing the till is really startling ...

maybe the average person doesnt even know these days what the word Recession means...

R stand for ? any idea?

Relationships...... or Reflection in the mirror....

Retail therapy is alive and well it appears...

Your a Reflectiion of the Retail trade LEK.

almost cheering up the whole retail trade community.

[LaserEyeKiwi]

HLG looking interesting LEK.

starting to form a little base here waiting on news...

still a very high DIV here that the market doesnt believe in.

The whole bling ringing the till is really startling ...

maybe the average person doesnt even know these days what the word Recession means...

R stand for ? any idea?

Relationships...... or Reflection in the mirror....

Retail therapy is alive and well it appears...

Your a Reflectiion of the Retail trade LEK.

almost cheering up the whole retail trade community.

just thinking aloud here - but if unemployment remains low, then perhaps even in a recession with rising mortgage rates - there are still some retailers with a customer base unimpacted by the negative forces. Eg younger working population with no mortgages, who have seen rising wages over last 12 months. In Australia in particular this demographic hasn’t really been impacted by higher rental costs either given Australia’s rather tenant friendly laws in regards to raising rents.

[winner69]

HLG looking interesting LEK.

starting to form a little base here waiting on news...

still a very high DIV here that the market doesnt believe in.

The whole bling ringing the till is really startling ...

maybe the average person doesnt even know these days what the word Recession means...

R stand for ? any idea?

Relationships...... or Reflection in the mirror....

Retail therapy is alive and well it appears...

Your a Reflectiion of the Retail trade LEK.

almost cheering up the whole retail trade community.

You spot on waltz …a large percentage of population haven’t heard of and don’t worry about recessions.

A workmate years ago asked what happens in a recession …I asked him what happened to you in such a such year and he replied nothing much …..I then told that’s what happens in a recession…nothing much

[winner69]

Macpac report was interesting in that highlighted the difference between Oz and NZ …Oz sales booming / NZ down the gurgler

[Waltzing]

Oh thats a Classic "I then told that’s what happens in a recession…nothing much"

.....:t_up:

[Muse]

W69 - is datamine’s retailwatch data out? I dont have my login handy and curious how july went

[bull....]

wow big fall in retail sales

[winner69]

W69 - is datamine’s retailwatch data out? I dont have my login handy and curious how july went

Seems stuck on June still ....unusual to be so late

[winner69]

Stats NZ Retail Sales June Quarter

June quarter $ sales up 3.8% on last year - volume sales down 3.7%

By industry quite interesting ..and shows impact of inflation

Numbers are % change from pcp

[LaserEyeKiwi]

Always a tad confused by the statsnz figures - actual value of retail sales were up $1 Billion year on year, yet they are adjusted down due to “seasonal” effect (how does comparing two June quarters introduce seasonality?) & “Price effects” (eh?)

Form the end of the report: “Without accounting for price effects and seasonal patterns, in actual terms, the value of total retail sales was $28.5 billion in the June 2022 quarter, up 3.8 percent ($1 billion) compared with the June 2021 quarter.”

[Muse]

Always a tad confused by the statsnz figures - actual value of retail sales were up $1 Billion year on year, yet they are adjusted down due to “seasonal” effect (how does comparing two June quarters introduce seasonality?) & “Price effects” (eh?)

Form the end of the report: “Without accounting for price effects and seasonal patterns, in actual terms, the value of total retail sales was $28.5 billion in the June 2022 quarter, up 3.8 percent ($1 billion) compared with the June 2021 quarter.”


Looking at the excel numbers directly always tells a more coherent story than what stats nz are able to enunciate.

https://www.stats.govt.nz/assets/Uploads/Retail-trade-survey/Retail-trade-survey-June-2022-quarter/Download-data/retail-trade-survey-june-2022-quarter.xlsx

[LaserEyeKiwi]

Weekly Update:

14094


======================

Shipping costs continue to fall, now under $6k per container:

14095

======================

NZ petrol prices continue trending lower

14096

======================

Fixed mortgage rates continue a slow decline form then recent peak:

14097

[LaserEyeKiwi]

Now average rents are also falling. Pretty nice in a high inflation environment (nice for tenants, not for property investors).

14102

[winner69]

Retail sales on a roll in Australia - ABS July show total for July 15% up on last year

Impressive chart - total is excluding food related groups .... and clothing is shown has from my HLG workings

[LaserEyeKiwi]

Retail sales on a roll in Australia - ABS July show total for July 15% up on last year

Impressive chart - total is excluding food related groups .... and clothing is shown has from my HLG workings

whoa. Does that exclude petrol?

i guess matches what Michael Hill management were mentioning today in their comment about first 8 weeks of FY23 so far.

[Waltzing]

Winner is all over the stats as usual.. from his hated CNBC ..

"So far, however, actual consumption has not been nearly as depressed as confidence surveys might suggest. Westpac, for instance, said spending on its cards rose 1.3 index points in the two weeks to Aug. 20."

[winner69]

whoa. Does that exclude petrol?

i guess matches what Michael Hill management were mentioning today in their comment about first 8 weeks of FY23 so far.

LEK ….fuel / motor vehicles aren’t included in ABS Retail Trade ( Stats NZ do include)

That clothing line includes jewellery / personal accessories …..Michael Hill / Glassons AU creaming it.

[Waltzing]

Winner does that mean retail is back as a beagle rated Buy?

who buying , whos buying .. where are they buying what...or what are they buying where...

https://www.youtube.com/watch?v=kTcRRaXV-fg

[winner69]

Winner does that mean retail is back as a beagle rated Buy?

who buying , whos buying .. where are they buying what...or what are they buying where...

https://www.youtube.com/watch?v=kTcRRaXV-fg

If got Oz exposure it will help ….NZ in doldrums.

[Waltzing]

MHJ guys a bunch of UK boys on holiday in Auss....

was a scuffy dog and now the dog days of summer coming....

https://www.youtube.com/watch?v=9wWQTl1QCNs

who would have though they could keep the scuffy company going and making money..

notice the market expenses are up and employee...

they spending to keep the show going...

they added near 20 million to expenses on those alone.

Shows they arnt afraid to show off on stage to attract the audience and reward the troops.

[Muse]

Re: Aussie retail growth rates it's worth recalling the lockdowns in the previous corresponding periods being cycled...
14104

August & September should produce strong year on year growth. A brand I watch closely as a read through for how Glassons AU is performing is Universal Store (the later which I became a minor shareholder in June) which operates with a June year end. In their latest presso they talked to 55% higher sales in July & August (new FY23 yr) than in the previous 8 week period.

No doubt the Aussie economy is far stronger than NZ's and there is some geniune strength in the underlying retail trade, which is well above trend. But that also leads me to suspect inflation will continue to rise and their interest rates will likewise rise & surprise on the upside. AU was late to the party when it came to raising interest rates, and while a bit lower than NZ's, the vast majority of mortgages there are floating, & the flow through will be felt quickly.

The july figures do pre date the cash flow impact of RBA rate hikes in May and June. There is an average 3 month delay between an increase in the RBA cash rate and the increased mortgage being deducted from a mortgage holder's bank account (according to Commonwealth bank research).

Between all this makes for interesting / problematic forecasting & investment timing decisions. I suspect month to month spending will remain strong for 1-2 more quarters and then start to weaken considerably. But as the underlying trend weakens year on year growth rates both at an aggregate industry level and company level will still be posting strong growth as it cycles over lockdown effected periods. So there could be a lot of excitement come 1H FY23 results, followed by expectations being highly disappointed in 2H FY23.

Just my two cents. Important to do your own research.

[Waltzing]

YUP but MHJ got the land of bears, salmon and MOOSES'S....

and even if MHJ can keep it ticking then its got to be rerated up to near a 2 FA...if they can get the div to 10 cents over the next few years..

its gone from a buy and dump to a buy and hold...

Glassons only an AUS story...

not time to kick MHJ dog down yet.

[Muse]

YUP but MHJ got the land of bears, salmon and MOOSES'S....

and even if MHJ can keep it ticking then its got to be rerated up to near a 2 FA...if they can get the div to 10 cents over the next few years..

its gone from a buy and dump to a buy and hold...

Glassons only an AUS story...

not time to kick MHJ dog down yet.

TBH I didnt have MHJ in mind with my post, and I know nothing about the Canadian market or jewellery trade. All I know is I’m pleased I purchased my wee MHJ stake when I did and am a happy holder.

[LaserEyeKiwi]

Re: Aussie retail growth rates it's worth recalling the lockdowns in the previous corresponding periods being cycled...
14104

August & September should produce strong year on year growth. A brand I watch closely as a read through for how Glassons AU is performing is Universal Store (the later which I became a minor shareholder in June) which operates with a June year end. In their latest presso they talked to 55% higher sales in July & August (new FY23 yr) than in the previous 8 week period.

No doubt the Aussie economy is far stronger than NZ's and there is some geniune strength in the underlying retail trade, which is well above trend. But that also leads me to suspect inflation will continue to rise and their interest rates will likewise rise & surprise on the upside. AU was late to the party when it came to raising interest rates, and while a bit lower than NZ's, the vast majority of mortgages there are floating, & the flow through will be felt quickly.

The july figures do pre date the cash flow impact of RBA rate hikes in May and June. There is an average 3 month delay between an increase in the RBA cash rate and the increased mortgage being deducted from a mortgage holder's bank account (according to Commonwealth bank research).

Between all this makes for interesting / problematic forecasting & investment timing decisions. I suspect month to month spending will remain strong for 1-2 more quarters and then start to weaken considerably. But as the underlying trend weakens year on year growth rates both at an aggregate industry level and company level will still be posting strong growth as it cycles over lockdown effected periods. So there could be a lot of excitement come 1H FY23 results, followed by expectations being highly disappointed in 2H FY23.

Just my two cents. Important to do your own research.

This is why MHJ also provided comparison to 1st 8 weeks of FY2021 (which didn’t have lockdowns), which showed 13.4% growth in FY23 vs that period.

[Muse]

Weekly Update:

======================

Fixed mortgage rates continue a slow decline form then recent peak:

14097

These are awesome LEK thanks v much for doing them.

The last point on fixed mortgages retreating a bit got me do some thinking. Long thinking out loud ramble follows, not specifically related to your post, but just on interest rates.

I see ave 2yr fixed mortgages have decreased by ~22bps, according to our favourite website, interest.co.nz.

I wouldn't be surprised to see fixed mortgages rise a wee bit after the relief rally in bank funding costs (eg swap rates). Swaps are rebounding a bit, offshore funding costs are rising which trickles in to NZ....would expect SWAPs and fixed mortgage costs to be undulating, like the ridge of a tramping track that has constant ups and downs, but staying in a tight range.

But it's my pretty firm view the weighted average effective mortgage rates paid by households in aggregate has risen and will continue to rise for the next 6-12 months, before plateauing & hopefully retreating at some point. ANZ recently had a pretty interesting chart (below) breaking down the tenure of mortgage durations. 59% of mortgages are floating or fixed for less than 1 year, 41% for more than 1 year. Fixed for less than 6 months and fixed for 6-12 months are the top tenures, followed by fixed for 1to2 yrs, then floating, then 2-3yrs, then a tiny bit of 3yrs plus.

14105


As far as available discretionary spending goes, a slight decrease in fixed mortgages from a month or two ago doesn't improve or alleviate spending pressures, as relevant point of reference is the rate the mortgage being refixed is coming off of...ie were mortgages set 2 years ago, 1 year ago, or 6 months ago, and the prices back then. In all cases the rate is higher now than when mortgages were last priced.

Second, floating rates are tied to the OCR, and more or less rise in lock step with them. So as the OCR keeps going up, floating rates will continue to rise at the same rate. Floating isn't as popular as it was c.2010-2015, but its still meaningful, and has at least another 50bps to rise (probably can't say the same about 2 year rates!)

ANZ have been arguably the most accurate economic forecaster over the last year w/ respect to inflation and interest rates and they now reckon the OCR will get to 4% and stay at that level to the end of 2024 (the end of their forecast period). They reckon we have a little bit further to go before we hit peak interest rates but then they forecast it'll persist longer than other forecasters.

The very worrying thing about longer term rates was the little nugget the RBNZ dropped about re-evaluating the neutral OCR. Currently they and most forecasters think its about 2.5%. But if for some reason they decided it was 3% or 3.5%, then you'd have to tack on that incremental change to the guided inflation track to achieve the intended amount of monetary tightening (IE, if the neutral rate was raised from 2.5% to 3%, the OCR track would have to rise from 4% to 4.5%, or 5% if the neutral rate was raised to 3.5%). That sounds high, but the neutral rate was estimated by the RBNZ at 4% in mid 2014, and 5% back in 2006, so in the context of history, total plausible if not conservatively so.

14106

There's not much we can do about that other than toss a coin to predict if the RBNZ will change it or not, but if they do its a biggie for households and employment. They are working on it right now and won't release their revised view until next year.

I guess I just keep coming back to how interest rates have to date interacted with retailer SP's & their economics and how that could change going forward. 10 year treasury rates have risen and that saw a bunch of retailer SP's fall concurrently (particularly in aussie), thanks to CAPM theory and all that. But the economic flow through has only been partial. Households still have jobs, they have savings, and there is still around 40-50% of mortgage holders that are yet to refix into today's interest rates. Nearly all mortgage holders will have mortgages at "new normal" rates by the end of this year, eventually some of those savings will be depleted, travel is on the cards again, unemployment forecast to rise to 5% by end 2024 by ANZ, so its not a sudden pop, but a continuous and meaningful reduction in retail spend. So I remain pretty pessimistic about retail in NZ, despite the indications that fuel and freight may be receding. In the short term I'm more mindful/worried about margin compression (both at the GP% level and increases in fixed costs as a % of sales) than I am about sales, and in the medium term more worried about sales as unemployment rises.

This is all relevant to NZ only, although other markets could be directionally similar. I do think it is a highly positive and desirable feature of retailers and other cyclical businesses that are active and successful in multiple markets. Countries business cycles will be different and fire at different times, and I think of it as an engine with different pistons. That reduces the overall risk of the company (once it has proved it can be successful overseas) which ultimately makes it more valuable.

anyone who got through this whole post give yourself a pat on the back.

[Waltzing]

DR Feynman created some little lines, dot and wiggles for short hand physics...

yep inflation can be a real kicker in the guts for stocks...

https://en.wikipedia.org/wiki/Feynman_diagram

[Onemootpoint]

A nice bit of bedtime reading awaiting :p

[winner69]

TSB raised its floating rate by +50 bps to 7.55% today

[LaserEyeKiwi]

TSB raised its floating rate by +50 bps to 7.55% today

Surely cant be many kiwis on floating rates?

32% of kiwi households currently have a mortgage (the other 68% are either renting or mortgage free).

The median mortgage owing, for the 32% that have one, was $260k last year.

I would guess that the 32% with mortgages have a disproportionately high amount of the retail spend, but I would guess that would be more pronounced for big ticket items.

[Ggcc]

Surely cant be many kiwis on floating rates?

32% of kiwi households currently have a mortgage (the other 68% are either renting or mortgage free).

The median mortgage owing, for the 32% that have one, was $260k last year.

I would guess that the 32% with mortgages have a disproportionately high amount of the retail spend, but I would guess that would be more pronounced for big ticket items.
I have a mate who is currently on a floating rate. He is gambling that it will go down as fast as it went up......... I advised he should fix it about a year ago. Banks are fast to increase and always slow to decrease.

[bull....]

harvey norman reported slowing sales for there full yr yesterday and there normal positive outlook

[Muse]

Some unpleasant Datamine Retailwatch figures out for July

14118

[winner69]

Some unpleasant Datamine Retailwatch figures out for July

14118

Not good eh FM .....best one can say total up a tad on July last year - but only because Travel +68% and Fuel +13%

They a bit slow this month but shouldn't complain as it is free

[winner69]

Interesting - sales July v last July

Total +1%

Instore down 2.6% and online up 24%

Online Domestic down 2% and online Offshore up 65% ( Online split is 48% Domestic / 52% Offshore)

[Muse]

Interesting - sales July v last July

Total +1%

Instore down 2.6% and online up 24%

Online Domestic down 2% and online Offshore up 65% ( Online split is 48% Domestic / 52% Offshore)

Yeah interesting. I sorta think with the big increase in online these data series are getting less reliable - perhaps directionally indicative - but not much more than that. This is one of the better ones - the paymark data is getting a bit irrelevant

[winner69]

Harvey Norman said NZ sales were down 3.6% in 1st half and down 2.9% in second half …year ending 30 June

[LaserEyeKiwi]

The above smells a lot like the theory that kiwis are splurging on overseas holidays now that the borders are open, to the detriment of NZ retail spend.

[Grimy]

The above smells a lot like the theory that kiwis are splurging on overseas holidays now that the borders are open, to the detriment of NZ retail spend.

Was always going to happen. My son is in Europe at present for a month......

[LaserEyeKiwi]

Was always going to happen. My son is in Europe at present for a month......

NZ of course will see the reciprocal uplift in inbound tourism (which will help some domestic retailers), but there is a lag compared to outbound travel.

[Muse]

NZ of course will see the reciprocal uplift in inbound tourism (which will help some domestic retailers), but there is a lag compared to outbound travel.

agree - but I reckon the inbound tourists (and outbound kiwi travellers) will probably benefit KMD, more so than (say) briscoes, WHS, HLG, Michael hill etc. net net tourism a negative i'd wager, w/ exception of KMD

[Grimy]

Outbound still helping KMD. My son and partner bought new travel packs and other gear from KMD for their trip.

[Waltzing]

Might be some buying oppos vomping up soon ...

ripples... it all about ripples apparently ... thats like "tipping points"

https://edition.cnn.com/2022/09/02/investing/china-worst-earnings-season-zero-covid-intl-hnk/index.html

[LaserEyeKiwi]

Weekly Update:

14123

====================

Big drop in international shipping rates this week.

14124

====================

Petrol creeped up a little this week vs last week (but still showing a monthly drop)

14125

====================

1 yr fixed mortgage Interest rates:

14126

[Old mate]

Thanks LEK . Jeepers those shipping rates have come back alot since highs.

[winner69]

A consumer out of US

Our latest Consumer Pulse research shows that there’s more pressure than ever on consumer confidence. But despite a general feeling of pessimism, there are signals of hope in consumer behavior.

And

Three quarters of consumers are changing their shopping habits ..ie trading down


https://www.mckinsey.com/business-functions/growth-marketing-and-sales/our-insights/the-great-uncertainty-us-consumer-confidence-and-behavior-during-inflationary-times?__hScId__=v700000183040a093e8c95726e96638918&__hRlId__=b84efc581b9048ca0000021ef3a0bce2&__hDId__=b84efc58-1b90-48ca-83cf-ab5bedb249a5&__hSD__=d3d3Lm1ja2luc2V5LmNvbQ==&cid=other-eml-nsl-mip-mck&hlkid=dfa3dfbf14c442f78357ebefdf0d110d&hctky=9198018&hdpid=b84efc58-1b90-48ca-83cf-ab5bedb249a5&cid=app

[LaserEyeKiwi]

Decent year-on-year retail growth in August, but of course it is comparing to the nationwide Level 4 lockdown last year which started on August 17th.


AUCKLAND, 7September2022 –One year on from the Delta outbreak that locked down New Zealand, data shows that Kiwi merchants are continuing to adjust to the legacy of COVID-19 and its impacts, while the Government’s Cost of Living Payment coincides with a small bump in consumer spending.

Consumer spending through Worldline NZ’s payments network amongst Core Retail merchants (excluding Hospitality) was $2.83B in August 2022, up 14% on August 2021 when all New Zealand moved to a Level 4 lockdown mid-month.

Worldline’s Head of Data, George Putnam says that several retail business sectors have seen significant lifts in consumer spending in August 2022 over the same month last year, including a 66% lift in spending through Hardware and Furniture stores, and an 80% lift in spending at Clothing and Footwear shops.

“Any year-on-year comparisons for August spending must obviously be looked at through the lens of COVID-19 and the restrictions that came about following the Delta outbreak in that month last year,” says Putnam.

“While the August bounce-back of 14% is positive, the overall picture is still one of slow growth over the long term as merchants and consumers continue to adjust to the massive changes that have occurred in the last two to three years.

“When compared to pre-Covid 2019, the growth rate in 2022 dropped from 15.1% in July to 11.6% in August, a drop exaggerated by the fall of days in August this year.”

Putnam also notes that consumer spending over the first few days of August 2022 saw a small bump at the same time as the first installment of the Government’s Cost of Living Payment began to be deposited with eligible New Zealanders.

“The data shows there was a $14m lift in spending in the first threedays of August through Worldline’s payments network, relative to the same three days one week earlier.

“However, at just 4% of total spending, we cannot definitively say that this change is due to the Government’s Cost of Living Payment, which was much larger, or is simply a common day-to-day variation.”

Regionally, spending through Core Retail merchants (excluding Hospitality) remains above 2019 levels in all regions. The 2019-2022 growth rate was highest in Taranaki (23.2%), Hawke’s Bay (21.8%) and Wairarapa (21.1%) and lowest in Gisborne (2.2%) and Wellington (6.6%).

Beyond August, the early days of September have also seen a small increase in consumer spending, most likely due to Father’s Day, with spending up in the three days ending Sunday 4th September (relative to the same days a week earlier) amongst Bookshops (+$0.6m, +21%), Sports shops (+$1.4m,+21%), Hardware stores (+$2.4m, +8%) and Restaurants / Cafés (+$3.3m, +6%)

14135

[winner69]

Tony Alexander says things looking better:

For the second month in a row there has been a lessening in people's plans for cutting back on spending in the next 3-6 months to a net 11% negative from 18% in August and 27% in July. Positive spending intentions exist for home renovations, groceries, domestic and offshore travel, shares, and wellbeing services. For everything else spending plans are negative including for purchasing a house to live in - though again, this degree of negativity has now eased for two months running.

[LaserEyeKiwi]

Weekly update:

14148

================================================== ==========

14149

International shipping rates continue to plummet

================================================== ==========

14150

Some upward pressure on local petrol prices as NZ dollar sold off recently vs USD

================================================== ==========

14151

Fixed interest rates holding relatively steady at ~5%, but floating rates spiking higher still.

================================================== ==========

14152

ANZ truckometer reading for August came in positive

[Habits]

The truckmeter v GDP is a good one and shows how closely co-related they are. Truckometer is clearly a leading indicator

[percy]

Australian commentary.
https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/PYQFBspZtJcQe0Pnk892DN3A/fQU0my1mMPAeouulb7x5TQ

[LaserEyeKiwi]

Holy moly!! never seen anything like this…

14164

[LaserEyeKiwi]

Weekly Update:

14167

================================================== =============

As noted above - big movement downwards in international shipping costs:

14168

================================================== =============

Slight drop week on week for petrol prices.

14169

================================================== =============

In big move upwards, ANZ now predicts 4.75% peak OCR next year:

14170

================================================== =============

Mortgage Interest rates picking up a tad (although worth noting TSB lowered to 4.69% 1-year rate this week)

14171

[winner69]

My mate Satish at Westpac says this on consumer confidence still being the doldrums

Westpac senior economist Satish Ranchhod said the report painted a grim picture. “Households’ finances are being squeezed by the rise in living costs and higher mortgage rates. The pressure on household budgets has been especially pronounced for those on lower incomes.”

Ranchhod said that pressure would become more pronounced over the coming months, as the central bank continued at pace to raise the official cash rate to tame inflation.

[LaserEyeKiwi]

A nice big payout of $303 to approx 300,000 Auckland households today:

https://www.stuff.co.nz/auckland/auckland-top-stories/300694534/more-than-350000-aucklanders-wake-up-303-richer-due-to-entrust-dividend

[LaserEyeKiwi]

Also more good news on current level of retail spending, from Interest.co.nz:




More than $3.9 bln was transacted on credit cards in August (C13 (https://www.rbnz.govt.nz/statistics/series/lending-and-monetary/credit-card-spending)), the largest August activity since ... well, forever. Sure August in 2021 was pandemically damaged, as was August in 2020. But the previous high was $3.4 bln in August 2019 and this 2022 level is +16% higher than that. Billings on NZ-issued cards used overseas are rising again too. Inflation will be a reason for some of these increases of course.

NO EVIDENCE OF CREDIT CARD STRESS

But balances outstanding on credit cards are not rising much at all (C32 (https://www.rbnz.govt.nz/statistics/series/lending-and-monetary/credit-card-balances)), down -5.5% year-on-year and down -18% from August 2019. But 'inflation' is not adding to these balances. Nor is there any evidence that the long-term retreat of balances incurring interest are reversing because they are not. They are down -29% from the equivalent pre-pandemic level.

[winner69]

In spite of the ‘gloom’ / ‘direness’ around consumers etc we should not forget that on an annual basis core retail sales have never declined … they’ve always been higher than pcp.

No different this time around

[LaserEyeKiwi]

Much delayed mini weekly update for last week:

14188

=============================

international shipping rates accelerated their free fall off a cliff…

14189

[LaserEyeKiwi]

Another Mini-update from last week as I exit holiday mode.

14210

14211
14212

14213

[LaserEyeKiwi]

Weekly update:

14229

==============================

Worldline (paymark) with good news for NZ retail:


AUCKLAND, 5 October 2022 – While recent consumer confidence surveys have forecast a drop in consumer spending, figures released by Worldline NZ today show that spending growth is actually continuing, albeit barely above the inflation rate.

Consumer spending through Worldline NZ’s payments network amongst Core Retail merchants (excluding Hospitality) was $2.92B in September 2022, up 16% on September 2021.


However, as this year-to-year comparative increase is relative to a time when merchants in New Zealand’s regions were operating at varying levels of COVID-19 lockdowns, Worldline’s Head of Data, George Putnam notes that it says very little about the current growth momentum and that longer-term data patterns are more insightful.


“As we saw last month, a large year-on-year jump in spending at this point in 2022 is primarily due to COVID-19 conditions at the same time in 2021, so we need to turn to 2019 as the pre-COVID baseline for any comparisons,” he says.


“A better measure of the trend at present is to look at the quarterly results since 2019. These confirm that spending growth is occurring, at least in nominal terms.”


Putnam says Worldline NZ’s consumer spending data for the latest September quarter were 14.6% above the pre-COVID levels of September quarter 2019, while the inflation rate over the same period was slightly less.


“We can see spending in the quarter ending September 2022 was 14.6% above that of three years earlier and the growth rate had increased from the three-year rate of 13.6% in the quarter ending in June 2022,” he says.


“However, spending growth is only just keeping up with rising prices. The September CPI is yet to be released but average prices are estimated to have risen by around 13% since September 2019, which implies we are spending in real terms around 1% more now compared to three years ago.


“In spite of that meagre real growth rate, we have seen several reports [1] in recent months that say consumer confidence is very low, so it is a pleasant surprise to see nominal retail spending still increasing – a case of the retail sector being not as bad as feared.”


Regionally, spending through Core Retail merchants (excluding Hospitality) remains above 2019 levels in all regions, with rankings similar to last month. The 2019-2022 growth rate was highest in Taranaki (31.3%), Hawke’s Bay (25.3%) and Wairarapa (25.3%) and lowest in Gisborne (4.2%) and Wellington (9.1%).

==============================

International shipping costs continue to plummet:

14230

==============================

Mortgage rates back to recent highs:

14231
==============================

petrol prices a little lower:

14232

[LaserEyeKiwi]

Stats NZ figures out for September retail spending:

https://www.stats.govt.nz/news/retail-card-spending-up-in-september/

“In actual terms, total card spending reached $8.6 billion, up 32.9 percent from September 2021.“Spending on hospitality services and durables made the largest contribution to the annual increase, as spending continued to rise and recover from the impact of having New Zealand under alert levels 3 and 4 in September last year,” Mr Ho said. Durables include non-essential items such as furniture, hardware, and appliances.”

[LaserEyeKiwi]

Interest.co.nz commentary:


STRONGER THAN EXPECTED
Retail spending (https://www.stats.govt.nz/information-releases/electronic-card-transactions-september-2022/) as recorded by electronic card transactions was stronger than expected in September, rising by +1.4%. Much of that appears to be related to increased spending by international tourists, although there was a surprising gain for spending on apparel. Spending in the hospitality sector is now back around the levels that we saw prior to the pandemic. But apart from that it is hard to know from this how much can be attributed to inflation. The number of transactions were up +5.3% from pre-pandemic levels, so there will likely be a 'real' gain. Inflation however will account for much of these September gains.

[LaserEyeKiwi]

Weekly update:

14247

Removed KPG, that can stay in the listed property sector analysis - looking to add more pure retail names: any suggestions? Was thinking RBD & MFB - thoughts?


==========================================


Shipping rates continue to drop, now actually starting to look, dare I say it, almost cheap.

14248

==========================================


91 steady on last week, Diesel up, now costs MORE than 91.

14249

==========================================

Interest rates creeping up to a new recent high

14250

[Habits]

Are those divy yields sustainable in your opin LEK

[Rawz]

Could add GXH

[Muse]

Could add GXH

i reckon keep it tight - focused on 'core retail'

i'd axe TRA from the group - has much different characteristics. Besides, rawz told me its a bank anyway

[Rawz]

i reckon keep it tight - focused on 'core retail'

i'd axe TRA from the group - has much different characteristics. Besides, rawz told me its a bank anyway

I changed my mind. TRA is actually a property development company. Soon they will own many many hectares of prime industrial/commercial land throughout NZ. Think about all the potential once you remove all the cars sitting on those beautiful lots!

[bull....]

was in costco on friday and sat
it was so busy.
had to que to get in friday and on sat it took us 2 hrs to get around the store cause it was shoulder to shoulder
lots of products way cheaper than competitors if you like bulk , others not so cheap so you got to know your prices to make the savings
spent 30mins waiting for my $18 pizza it was so packed think i was like no 100 in the order que lol but it was worth it , way better than domino's and really huge with heaps fillings. joined the crowd in the carpark scoffing there's lol

[LaserEyeKiwi]

Weekly update:

14266

================================================== =============

International shipping costs continues to plummet

14267

================================================== =============

Fuel prices relatively steady this week

14268
================================================== =============

Mortgage Interest rates continue heading up

14269

================================================== =============

[LaserEyeKiwi]

Weekly Update:

14273

================================================== ===========================

Mortgage rates spiking this week:

14274

================================================== ===========================

International shipping rates continue to plummet:

14275

================================================== ===========================

Petrol prices flat this week

14276

================================================== ===========================

[LaserEyeKiwi]

Oz retail sales:

14278

[na2m1]

Thank you LEK for the constant update appreciate your work!

[winner69]

Oz retail sales:

14278

Going OK in NZ as well I reckon

[winner69]

From my mate over there -

This is the most negative result since our survey started in June 2020 and signals that further pain lies ahead for retailers throughout the country as the Reserve Bank fights inflation with high interest rates.
We also have data telling us that not only are investors not following first home buyers into the housing market, owner occupiers aren’t either.


https://tonyalexander.lt.acemlna.com/Prod/link-tracker?redirectUrl=aHR0cHMlM0ElMkYlMkZ3d3cudG9ueW FsZXhhbmRlci5ueiUyRndwLWNvbnRlbnQlMkZ1cGxvYWRzJTJG VFYtU3BlbmRpbmctUGxhbnMtU3VydmV5LU5vdmVtYmVyLTIwMj IucGRm&sig=2MePemHdkzXbKrhqNJwnmB82hLen7dYJUMWwDCqWmMa9&iat=1667760822&a=%7C%7C611496996%7C%7C&account=tonyalexander%2Eactivehosted%2Ecom&email=qcmwvq5abY8hz7kZxf7GH735hO7C%2FF3J%2FgQB9Uu3 XAY%3D&i=219A228A1A1359

[LaserEyeKiwi]

Weekly Update:

14290

===========================================

shipping rates keep falling (remember this was $10.3k in Sep 2021)

14291

===========================================

Fuel prices down a couple of cents week on week:

14292

===========================================

Interest rates look to be heading to 6% (!)

14293

[winner69]

Shipping rates keep falling …….but not falling that much for NZ exporters and importers

Prices for moving containers are also falling on the main global routes, but the cost of moving freight to, and from, New Zealand has not fallen as much due to a reduction in the quantity of ships servicing our ports."

https://www.rnz.co.nz/news/business/477996/nz-missing-out-as-global-shipping-costs-ease

[LaserEyeKiwi]

From my mate over there -

This is the most negative result since our survey started in June 2020 and signals that further pain lies ahead for retailers throughout the country as the Reserve Bank fights inflation with high interest rates.
We also have data telling us that not only are investors not following first home buyers into the housing market, owner occupiers aren’t either.


https://tonyalexander.lt.acemlna.com/Prod/link-tracker?redirectUrl=aHR0cHMlM0ElMkYlMkZ3d3cudG9ueW FsZXhhbmRlci5ueiUyRndwLWNvbnRlbnQlMkZ1cGxvYWRzJTJG VFYtU3BlbmRpbmctUGxhbnMtU3VydmV5LU5vdmVtYmVyLTIwMj IucGRm&sig=2MePemHdkzXbKrhqNJwnmB82hLen7dYJUMWwDCqWmMa9&iat=1667760822&a=%7C%7C611496996%7C%7C&account=tonyalexander%2Eactivehosted%2Ecom&email=qcmwvq5abY8hz7kZxf7GH735hO7C%2FF3J%2FgQB9Uu3 XAY%3D&i=219A228A1A1359

Some surprising stuff in there on the retail spending intentions. Can attest to the housing market situation - it is dead as a door nail, complete absence of any spring/summer uplift. FOOP is very real, and the high interest rates and increased bank testing rates (8.5%) are clobbering the market.

[LaserEyeKiwi]

Just saw a quarterly CEO update to staff for one of NZs largest transport companies.

current quarter does not look great.

Indications that local inventory warehouses are full and there is significantly less volume of imports arriving. Also primary sector (forest / coal / steel) is soft.

[winner69]

RetailWatch sales data October

Things still going pretty well - punters still more than last year. Maybe still a bit of catch up from covid last year

Appears as if things returning to normal trend (post covid ups and downs) even though volumes might be a bit flat but its important to get the tills ringing.

Anyway, make of the numbers what you want.

[see weed]

WHS is the next cab off the ramp for a div. next week, and me being a divy chaser. Here we go, still about 6.5% yld better than bank. Not to forget coming up to the busy Christmas season.

[percy]

I was in WHS Eastgate store Sunday week ago at 11.40 am.
They were flat out.
Even a good que waiting for self serve check outs.

[Grimy]

WHS is the next cab off the ramp for a div. next week, and me being a divy chaser. Here we go, still about 6.5% yld better than bank. Not to forget coming up to the busy Christmas season.

2nd of December is dividend day. Next week is ex div.

[winner69]

Shipping rates keep falling …….but not falling that much for NZ exporters and importers

Prices for moving containers are also falling on the main global routes, but the cost of moving freight to, and from, New Zealand has not fallen as much due to a reduction in the quantity of ships servicing our ports."

https://www.rnz.co.nz/news/business/477996/nz-missing-out-as-global-shipping-costs-ease

Ft reports shipping companies reducing sailings to get whipping hand back

[LaserEyeKiwi]

Ft reports shipping companies reducing sailings to get whipping hand back

On the face of it, sound like illegal cartel like behavior.

[winner69]

October Electronic Card Spend Stats NZ

Seems the COL crisis only affected a few -- retail sales more than solid

Total October sales up 1% from Sept (seasonality adjusted)

October sales were 20% higher than last year -- that's pretty good

Durables a de facto measure of discretionary spend -- up 16% for month v pcp and current level of sales way above pre-covid trend

Love this chart

[LaserEyeKiwi]

Weekly Update:

14312

===============================================

International Shipping costs continue to plummet, now below pre-pandemic levels.

14313

===============================================

Petrol (91) Prices up 5c week on week, Diesel flat:

14314

===============================================

Mortgage rates continue higher:

14315

===============================================

[Sideshow Bob]

On the face of it, sound like illegal cartel like behavior.

Prices out of NZ remain crazy. Not sure for imports.

Ocean Network Express (6th biggest container shipping co in the world) in the 2nd quarter turned over $18.4b USD, EBIT was $11b USD. Shipped about 7% less containers compared to corresponding quarter, when they only made about $6-odd billion.....

[winner69]

US retail sales Oct up 1.3% on Sep pretty good

But Target says pretty gloomy outlook and shares tumble

Just as well NZ consumers seem pretty happy and WHS says things looking good..cost of living crisis just something the media keeps harping on about

[winner69]

man on tv says a staggering $270m spent in retail today .... black friday he said

what cost of living crisis

[Rawz]

man on tv says a staggering $270m spent in retail today .... black friday he said

what cost of living crisis

Things are very expensive but we still got our jobs you see.

[winner69]

In the seven days ended November 26, shoppers spent $350m. That was down 9.5 per cent on last year

https://www.nzherald.co.nz/business/black-friday-sales-down-69-per-cent/BN4IZSLWBJEFHKX7SGQ36HPZRE/

[850man]

In the seven days ended November 26, shoppers spent $350m. That was down 9.5 per cent on last year

https://www.nzherald.co.nz/business/black-friday-sales-down-69-per-cent/BN4IZSLWBJEFHKX7SGQ36HPZRE/

I wonder how it's looking in Aussie?

[winner69]

That Bradford on 1News last night reported that there’s hundreds of millions of surplus stock in warehouses and stores ……consequence of supply chain blah blah

Her conclusion - expect a lot discounting soon to clear this stock

[winner69]

RetailWatch numbers out for November

Not as robust as the last few months ... a bit of red showing

Just as well for cafes, pubs and travel stuff eh

[Rawz]

Weekly Update:

14312

===============================================

International Shipping costs continue to plummet, now below pre-pandemic levels.

14313

===============================================

Petrol (91) Prices up 5c week on week, Diesel flat:

14314

===============================================

Mortgage rates continue higher:

14315

===============================================

LEK must be on a early christmas holiday. Missed last weeks updated.

Guess he deserves a break, these updates are really appreciated (including the property one)

[winner69]

At last some real reporting and none of this gloom and doom about the sky falling in

'People don't really care about recession,' says retailer as Christmas spend ramps up

https://www.stuff.co.nz/national/130763224/people-dont-really-care-about-recession-says-retailer-as-christmas-spend-ramps-up

[winner69]

WOW ....record Boxing Day sales

Rádio NZ said New data from payment network company Worldline showed New Zealanders' Boxing Day spending reached record heights this year

All good for Briscoes, WHS, HLG and maybe even Kathmandu

Share prices should go up on news of record sales ..I love new records being set

[clearasmud]

When's the recession going to start?

[ynot]

When's the recession going to start?
After boxing day.

[clearasmud]

After boxing day.

Yes, we know it's always very quiet between Xmas and Jan 6th

[ynot]

Yes, we know it's always very quiet between Xmas and Jan 6th
no, i mean the recession starts tomorrow.

[Muse]

A pretty interesting thread to revisit in light of the WHS’s profit warning tonight. Some real gems back in april and may.

[winner69]

RetailWatch data for December month came out today

Would have to say the numbers are pretty gloomy looking - core sectors down v December 2021 and verall sales only up from travel and entertainment things. Even clothing was down

I did the old comparison to 2019 trick -- even then the % increases are pretty small when you think it's over 3 years

[Muse]

Thanks for the graph Winner. Bit of compression there especially considering inflation, and perhaps signals wage restraint might not be too far away and we can in time get interest rates back down. Fingers crossed.

I was reviewing a handful of my Australian positions and as part of that did a bit of work on underlying volumes in the Australian retail market. Thought I'd share as Australian retail relevant to a number of NZX listed firms eg Hallenstein Glassons, KMD, MHJ etc.

I find it interesting to look at volumes as opposed to nominal sales as I think it gives a better indication of underlying activity. Found on the Australian Bureau of Statistics a quarterly timeseries of seasonally adjusted volumes by retail segment - perfect. I indexed the values to the beginning of 2000 and calculated the volume trend to the end of 2019 (to avoid contaminating the trend with all the lockdowns, rebounds, QE and other oddities occurring since).

Below are the seasonally adjusted volumes and associated trend the clothing+accessories+shoes segment indexed to the start of 2000, with the consistent growth pattern leading to 0.98 r2 in the trendline - incredibly strong - which tells us the trend definitely means something.

14420

Then I dropped in the actual retail volumes to 30 September 2022, and rolled forward the previous trend line without updating it for the actual data from January 2020 to September 2022 to get a sense of how current clothing retail volumes compare to the pre covid trend line. This is below.

14421

Clothing retail volumes in the September quarter were up over 21% from their pre covid trend. In all the historic data there hasn't been another data point whose variation above trend was this high.

My review of the October and November seasonally adjusted sales (including inflation) was robust so I'd assume that trend continues and perhaps widens in the December quarter.

So Aussie going gangbusters.

But given that very strong correlation in the volume trend, I can't help but wonder if a reversion to trend (or overshooting to below trend as is often the case) could unfold. I find this quite influential and informs my perspective on the maintainability of Aussie retail volumes, particularly over recent trading periods. High volumes lead to high rebates and lower discounting....falling does the inverse exacerbating the impact on margins together with the fall in sales.

Can't help but wonder if OZ will follow NZ in the retail space, and the last 12 months have been a temporary overperformance in line for a large fall. Or who knows, some may argue the world has changed and the shift to above trend growth is permanent.

All musings, but interesting to ponder, particularly if you are looking to make long term investments with spare dosh or a current holder in the sector. Random perspectives...do your own research...the ABS is a wonderful tool.

[Rawz]

That is really interesting stuff, FM. Thanks for sharing! Definitely food for thought.

[bull....]

the slowdown has started

Consumers cut their spending using electronic cards in December, once those figures were adjusted to take into account it is usually a high-spending month, Stats NZ has reported.
ASB senior economist Mark Smith said the spending figures meant the economy might have shrunk in the December quarter and could already have entered a recession

https://www.stuff.co.nz/business/131000848/nz-may-have-entered-recession-as-consumers-obey-reserve-bank-and-cut-spending

[bull....]

the slowdown has started in Australia now

Australian Retail sales fell 3.9% in December on a seasonally adjusted basis as cost-of-living pressures and rising mortgage repayments began to hit households

https://www.theguardian.com/australia-news/2023/jan/31/cost-of-living-pressure-causes-dip-in-december-retail-sales

[percy]

This from SCIL on Unlisted today.They are the owners of The Hub,which was formerly known as Hornby Mall ,Christchurch

There has been the usual media discussion (negative) around retail trading patterns for the month of December
leading up to Christmas and many of these have centred around the rhetoric of an impending recessionary
downturn.
It is not my style to cherry pick only good news but I am sure it is a confidence booster to you to know that the
Mall experienced an 8.8% increase in tenancy retail turnover for December 2022 as compared to the previous
December with both anchors enjoying very positive increases. The Hub recorded its highest retail monthly
turnover with the exclusive GST total reaching a significant milestone figure.

[winner69]

Retail Watch data april month sales

In total 4.5% higher than April last year - cafes, travel etc keeping the numbers up

[Muse]

From the AFR

ASX retail stocks are on a horror run for good reason

https://www.afr.com/markets/equity-markets/asx-retail-stocks-are-on-a-horror-run-for-good-reason-20230525-p5db5c

[bull....]

this site only recently launched in NZ

Temu, which launched in New Zealand in March, is the global version of Pinduoduo, one of China’s biggest e-commerce sites. The Temu app (https://apps.apple.com/us/app/temu-shop-like-a-billionaire/id1641486558) is the most downloaded app in New Zealand, ahead of ChatGPT, WhatsApp, Google and TikTok, among others

https://www.newshub.co.nz/home/money/2023/06/lot-of-landfill-coming-our-way-after-colossal-chinese-e-commerce-site-temu-launched-in-new-zealand.html

i had a browse of site crazy cheap prices , guess this could have big ramifications for a lot of our retailers who wont be able to compete with these prices

[dubya]

this site only recently launched in NZ

Temu, which launched in New Zealand in March, is the global version of Pinduoduo, one of China’s biggest e-commerce sites. The Temu app (https://apps.apple.com/us/app/temu-shop-like-a-billionaire/id1641486558) is the most downloaded app in New Zealand, ahead of ChatGPT, WhatsApp, Google and TikTok, among others

https://www.newshub.co.nz/home/money/2023/06/lot-of-landfill-coming-our-way-after-colossal-chinese-e-commerce-site-temu-launched-in-new-zealand.html

i had a browse of site crazy cheap prices , guess this could have big ramifications for a lot of our retailers who wont be able to compete with these prices

I've used it a couple of times, as have some of my friends. It is (or maybe was?) free shipping on the first purchase, then free shipping on all orders over $30. The items I purchased were all good quality.
The tracking ability and the speed in which the items were sent to NZ and couriered to me leave AliExpress and Wish for dead!!!

[percy]

I've used it a couple of times, as have some of my friends. It is (or maybe was?) free shipping on the first purchase, then free shipping on all orders over $30. The items I purchased were all good quality.
The tracking ability and the speed in which the items were sent to NZ and couriered to me leave AliExpress and Wish for dead!!!

I looked at a jacket at $41.07..If I bought it would I have GST or any duty on it when it arrived in NZ.?
I bought a couple of men's watches from Wish.Cheaper buying a new one than buying a new battery for my old watch.

[dubya]

I looked at a jacket at $41.07..If I bought it would I have GST or any duty on it when it arrived in NZ.?
I bought a couple of men's watches from Wish.Cheaper buying a new one than buying a new battery for my old watch.

GST added at checkout Percy. I paid no duty and as far as I can recall there's no duty on anything purchased from overseas with a value of less than $1000.
On one order I bought 7 or 8 totally random and unconnected items, and they were all posted the very next day in one package. Temu must have an absolutely HUGE warehouse to store everything.

[percy]

GST added at checkout Percy. I paid no duty and as far as I can recall there's no duty on anything purchased from overseas with a value of less than $1000.
On one order I bought 7 or 8 totally random and unconnected items, and they were all posted the very next day in one package. Temu must have an absolutely HUGE warehouse to store everything.

Thanks dubya.
An incredible business.

[Fortunecookie]

Theres alot of talk about recession and impact on spending. All I agree on.

Not much has been discussed regarding the impact of WFH on demand. Certain households will be hoarding abit more cash because of it. However I do see that there is a slow trend moving towards full time in the office.

[bull....]

Retail spending dropped for the first time this year in May, showing the growing pressure on households’ finances.
Total retail card spending fell $113 million (1.7%) in May 2023 compared with April 2023, when adjusted for seasonal effects, according to Stats NZ.

https://www.stuff.co.nz/business/132294722/retail-spending-drops-monthonmonth-for-the-first-time-this-year

[Fortunecookie]

Retail spending dropped for the first time this year in May, showing the growing pressure on households’ finances.
Total retail card spending fell $113 million (1.7%) in May 2023 compared with April 2023, when adjusted for seasonal effects, according to Stats NZ.

https://www.stuff.co.nz/business/132294722/retail-spending-drops-monthonmonth-for-the-first-time-this-year



Footlocker NZ have been advertising their sales since boxing day last year.
Virtually the same stock. On boxing day the discount was around 40%. Now they are discounting at 70%.

I have been following a few retailers. The inventory numbers looks terrible. Account payables can't be paid off with cashflow so gets paid off by their debt facility.
I think more downside than upside.

[winner69]

Retail spending dropped for the first time this year in May, showing the growing pressure on households’ finances.
Total retail card spending fell $113 million (1.7%) in May 2023 compared with April 2023, when adjusted for seasonal effects, according to Stats NZ.

https://www.stuff.co.nz/business/132294722/retail-spending-drops-monthonmonth-for-the-first-time-this-year



Hey bull ----- sales were UP 5.3% on May last year

That's not too bad

[SailorRob]

Hey bull ----- sales were UP 5.3% on May last year

That's not too bad


And volume?

Sales up lots in Venezuela too.

[bull....]

Hey bull ----- sales were UP 5.3% on May last year

That's not too bad

price rises are so distorting eh

[winner69]

price rises are so distorting eh

Some say price rises lead to to greedy corporates increasing profits and thus causing inflation

So +5% in money terms good eh

[ValueNZ]

Some say price rises lead to to greedy corporates increasing profits and thus causing inflation

So +5% in money terms good eh
When have corporations ever not been greedy? Were they somehow leaving money on the table before?

[SailorRob]

When have corporations ever not been greedy? Were they somehow leaving money on the table before?


Many examples yes, Amazon being one of the most famous.

Left tons of money on the table, thus investing money into deliberately depressing their margins. Or essentially giving their customers money.

You won't see that investment anywhere in financial statements.

Read Nick Sleeps letters for a real understanding of this.

Many companies invest by not being greedy, fostering better relationships by looking after customers when if they wanted to they could price gouge etc..

[ValueNZ]

Many examples yes, Amazon being one of the most famous.

Left tons of money on the table, thus investing money into deliberately depressing their margins. Or essentially giving their customers money.

You won't see that investment anywhere in financial statements.

Read Nick Sleeps letters for a real understanding of this.

Many companies invest by not being greedy, fostering better relationships by looking after customers when if they wanted to they could price gouge etc..
And Amazon is now a trillion dollar business, so it's worked out for them. Amazon is still a profit driven entity (their decision to forgo profit now will see their profit greater in the future).

Besides the claim that is made by many is inflation is being driven by corporations greed, which is totally different to a company operating at a loss in the short term so they can expand their market share.

[SailorRob]

And Amazon is now a trillion dollar business, so it's worked out for them. Amazon is still a profit driven entity (their decision to forgo profit now will see their profit greater in the future).

Besides the claim that is made by many is inflation is being driven by corporations greed, which is totally different to a company operating at a loss in the short term so they can expand their market share.


Only a absolutely ignorant idiot communist would make that claim about inflation. I didn't realise that claim was made or I would have shut them down myself, and I would have taken great pleasure exposing them.

Corporate greed does exactly the opposite by figuring out how to create more goods and services with less resources.

30 years ago Spielberg was filming Schindler’s List in Poland so, to keep communication open with the Jurassic Park team in L.A., he rented two satellite channels through Polish television and kept them open at all times. The satellites cost $1.5m per week.

Cost today?

Free.

Quality today of the communication link? 1000 x better.

All due to corporate greed.

[SailorRob]

Some say price rises lead to to greedy corporates increasing profits and thus causing inflation

So +5% in money terms good eh


Some say, yes.

But no way is winner that dumb.

[bull....]

Some say price rises lead to to greedy corporates increasing profits and thus causing inflation

So +5% in money terms good eh

yep just need to weed those out from the ones that cant , anyway we know wage rises are not causing inflation ( cause in real terms there declining ) so yep must be greedy price increases causing inflation

[Valuegrowth]

Historically high asset prices are causing inflation. Cost of doing business, cost of living all have gone up worldwide. Now recession is getting postponed. Hope we are not going to see a deflation.

[SailorRob]

Historically high asset prices are causing inflation. Cost of doing business, cost of living all have gone up worldwide. Now recession is getting postponed. Hope we are not going to see a deflation.

Right.

So the historically high asset prices in the many years before Covid were causing inflation?

Damn, I remember Orr telling banks they had better prepare their systems for negative interest rates.

[winner69]

World needs a resurgence of the Occupy Movement….. that’ll sort out a few problems.

[Valuegrowth]

Inflation often lead to speculation by businesses and individuals because they expect better returns than inflation. Financial speculation is making the global food crisis worse.

[bull....]

this site only recently launched in NZ

Temu, which launched in New Zealand in March, is the global version of Pinduoduo, one of China’s biggest e-commerce sites. The Temu app (https://apps.apple.com/us/app/temu-shop-like-a-billionaire/id1641486558) is the most downloaded app in New Zealand, ahead of ChatGPT, WhatsApp, Google and TikTok, among others

https://www.newshub.co.nz/home/money/2023/06/lot-of-landfill-coming-our-way-after-colossal-chinese-e-commerce-site-temu-launched-in-new-zealand.html

i had a browse of site crazy cheap prices , guess this could have big ramifications for a lot of our retailers who wont be able to compete with these prices

here's the american version of temu another super cheap online site just launched nz

https://nz.shein.com/?url_from=nzgooglebrandshein_shein02_srsa_20210124&cid=10021329328&setid=99787779094&adid=494298636196&pf=GOOGLE&gclid=EAIaIQobChMI07bswrScgAMVBtAWBR1Z1AUeEAAYASAA EgIm0_D_BwE

[Muse]

Stats NZ credit card spending out.
Apparel spending for the month of July 2023 of $312m down 4.3% from $326m in July 2022.
For those retailers operating with a July year end (& implicitly 2H end), the 3rd and 4th quarters couldn't look more different.
Seems like ages ago but easy to forget how hard February and March 2022 were for rag traders...the lockdowns had just ended and Omni was in full surge - people avoiding shopping, then getting sick and staying at home.
February and March 2023 apparel sales according to Stats NZ were up 23.2% over this period. From April to July sales have fallen 2% in 2023 over the same period last year, with that trend accelerating in July.
That 2 month bump in February and March 2023 as they cycled over the omni impacted PCP helps provide for 5% overall growth for the 6 month period ended 30 July, though the underlying trend is much weaker than that.
I'd imagine trusty old Hallenstein Bros and Glassons NZ outperform that 2H 2023 vs 2H 2022 as their 2H FY22 NZ sales seemed disproportionately impacted.

[bull....]

Retailers pin hopes on holiday period in the face of sluggish consumer demand
The Retail NZ Sales Index indicates sales rose 0.5 percent in the third quarter ended September, over the year earlier, while cost inflation rose 5.6 percent

https://www.rnz.co.nz/news/business/501030/retailers-pin-hopes-on-holiday-period-in-the-face-of-sluggish-consumer-demand