Retail Stocks

[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 is the most downloaded app in New Zealand, ahead of ChatGPT, WhatsApp, Google and TikTok, among others

https://www.newshub.co.nz/home/money...w-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=nzgoo...SAAEgIm0_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/...onsumer-demand

[bull....]

The retail spending slump is getting worse, with sales figures falling for the fourth consecutive month - and the latest fall is the biggest of the four

https://www.interest.co.nz/business/...nsactions-data

even one of my fav's briscoe stock falling now must be contagious

[LaserEyeKiwi]

The retail spending slump is getting worse, with sales figures falling for the fourth consecutive month - and the latest fall is the biggest of the four

https://www.interest.co.nz/business/...nsactions-data

even one of my fav's briscoe stock falling now must be contagious

It’s the perfect storm right now:

- virtually all mortgage holders have now rolled off low rates to the new high rates
- Public sector workers are all pulling back spending as they fear job cuts
- the two above factors have driven a slump in the house building market, and all associated suppliers/employees
- combined with the housing market slump, the government has significantly reduced spending by nearly all government departments & SoEs, also rippling through as less money going into the economy to government suppliers and there employees for both large capex projects as well as operational spending.

So yeah, a perfect storm for both reduced and scared consumers hoarding what discretionary cash they do have.

Unfortunately the best way out of a recessionary environment (government stimulus) is something we are not going to get - and instead we are getting the opposite, a government spending reduction, which exasperates the problem. You would think National/Act would have a better grasp of basic economics, kind of shocked they are doing this. They could have still followed through with their headcount reduction in the public service, and also stimulated the economy with large capex spending - nuts that they aren’t.

[Nor]

Doesn't government spending reduction help in the goal of bringing inflation down? It is pointless if central bank and government go in opposite directions. It's equally counter productive when everyone expects wage and price increases to match inflation.

[LaserEyeKiwi]

Doesn't government spending reduction help in the goal of bringing inflation down? It is pointless if central bank and government go in opposite directions. It's equally counter productive when everyone expects wage and price increases to match inflation.

Inflation has been coming down for last 12 months, most of the stubborn inflation is in stuff not impacted by government & retail spending (eg tradable inflation which is International inputs & non-discretionary costs such as insurance/rates/taxes) . Government is decreasing/delaying capex & operational spending all over the show, causing a sharp deceleration in the parts of the economy that will have bugger all impact on inflation reduction. Honestly this will be looked back on as a textbook example case of what NOT to do in a recession.

[Lego_Man]

Inflation has been coming down for last 12 months, most of the stubborn inflation is in stuff not impacted by government & retail spending (eg tradable inflation which is International inputs & non-discretionary costs such as insurance/rates/taxes) . Government is decreasing/delaying capex & operational spending all over the show, causing a sharp deceleration in the parts of the economy that will have bugger all impact on inflation reduction. Honestly this will be looked back on as a textbook example case of what NOT to do in a recession.

You are correct that the government should prioritise productive spending, but the rest is wrong.

NZ has a woeful productivity problem and a large current account deficit. The former means we can't supply goods for a given level of demand without causing inflation. The latter means we can't pay our way in the world with the goods and services we produce.

Therefore, demand needs to be throttled until equilibrium is achieved. The current account can be rebalanced via higher interest rates (to attract foreign capital) and/or a weaker currency.

Recessions sometimes are necessary, this is one of those times. It's an intended feature, and an inevitability after the inefficient profligacy of Robertson plus RBNZ overstimulus that all went in to housing speculation.

2017-2023 significant damaged the NZ economy and unfortunately the consequence will involves us accepting a lower standard of living, until we can get more productive again.

[LaserEyeKiwi]

You are correct that the government should prioritise productive spending, but the rest is wrong.

NZ has a woeful productivity problem and a large current account deficit. The former means we can't supply goods for a given level of demand without causing inflation. The latter means we can't pay our way in the world with the goods and services we produce.

Therefore, demand needs to be throttled until equilibrium is achieved. The current account can be rebalanced via higher interest rates (to attract foreign capital) and/or a weaker currency.

Recessions sometimes are necessary, this is one of those times. It's an intended feature, and an inevitability after the inefficient profligacy of Robertson plus RBNZ overstimulus that all went in to housing speculation.

2017-2023 significant damaged the NZ economy and unfortunately the consequence will involves us accepting a lower standard of living, until we can get more productive again.

Agree to (strongly) disagree.