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
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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.
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.
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.
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
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
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.
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 is the most downloaded app in New Zealand, ahead of ChatGPT, WhatsApp, Google and TikTok, among others
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
Reply With Quote
Bookmarks