Good, bad, unattractive: retail’s patchy start in Australia
In this article (4)
A slow but solid festive season for discretionary retailers in Australia has been followed by a spate of downgrades, making sentiment buoyant but patchy.
Analysts say the key festive season was a good one, albeit at the price of margins. Discounting has been estimated to have added AUD800 million (USD656.9m) to sales, and Citi analyst Craig Woolford has argued cheap-as-chips petrol and big spending on food suggests Australians have the ability to spend when they have the yen.
Last week, Harvey Norman chairman Gerry Harvey explained a jump in the furniture and homewares company’s share price by reporting a “big surge in sales” during the Christmas and New Year period.
Questions & Answers
Q.Was the recent festive season successful for Australian discretionary retailers?
Was the recent festive season successful for Australian discretionary retailers?
Analysts reported a good festive season for these retailers, however, this success came at the cost of margins due to significant discounting. Sales were boosted by an estimated AUD800 million from price reductions.
Q.What is the overall sentiment regarding the retail sector in Australia currently?
What is the overall sentiment regarding the retail sector in Australia currently?
Sentiment is described as buoyant but also patchy, following a slow but solid festive season. There has been a series of downgrades subsequent to the initial festive period reports.
Q.What factors suggest Australians have money to spend?
What factors suggest Australians have money to spend?
Citi analyst Craig Woolford points to cheap petrol and substantial spending on food as indicators of Australians' capacity to spend. This suggests consumers are willing to open their wallets when motivated.
Reader pulse
Was the festive discounting strategy sustainable?
23,406 votes so far