“Mixed bag” retail results marred by slow holiday sales
“After a very patchy Christmas trading period, we expect retail results to be mixed [though] supermarkets are likely to be a stand-out given a favourable industry backdrop,” Raymond said.
“Discretionary like-for-like sales growth is facing a number of challenges, most notably softer demand trends as the wealth effect diminishes with a fall in house prices.”
According to Westpac senior economist Matthew Hassan, sliding house prices and ongoing concerns about global trade wars and political uncertainty have put consumer confidence under pressure, with consumer views of their finances seeing a 5.9 per cent decline, according to the Westpac-Melbourne Institute.
Trading updates such as the one issued by Kmart, which saw comparable sales fall by 0.6 per cent in the first half of 2019, and Kathmandu, which dropped its projections for its first half of 2019 after sales slowed in the first 15 weeks of the fiscal year, reflect the patchy trading environment experienced by retailers over the holiday period.
“Christmas trading updates to date have been varied by category and retailer, confirming the divergence in sales trends we observed across our post-Christmas feedback,” Raymond said.
“[We] expect sales momentum to also converge for discount department store retailers, with Big W likely to have won shoppers back during the key Christmas trading period,” Raymond said.
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