Retail Stocks

[Habits]

That learning curve is someone else's cliff I suspect, such as the retailers faced with insurance claims and clean ups, fourth time in 12 months I think I heard. Terrible.

[winner69]

From a link on WHS thread -

Leader of local payments, EFTPOS and transactional services company, Worldline recorded a 12 percent increase in retail since 2019 in the seven days leading up to Easter Monday on April 18.

It is reported that the long weekend spending levels were on par with numbers seen in 2021, however it is eight percent above the pre-Covid Easter long weekend of 2019.

I assume using the 2019 period is an effort to compare to normality.

So lead up to Easter period sales have grown at 3.8% pa over the last 3 years ... and for the Easter weekend period at 2.6% pa.

Seems reasonable normal growth rates --- suppose the covid resurgence is all over and sales have 'normalised' ..... meaing looking forward 4%-5% growth would be the norm

[Muse]

jeesh - department stores, clothing & shoe spending looks pretty weak based on that EFTPOS data. I wouldn't worry though Datamine's 'Retail Watch' is better quality. That should be out soon.

[winner69]

ANZ Business Outlook

“The retail sector is the most pessimistic about the outlook for profits and their own activity – consistent with the dramatic fall in consumer confidence over the past couple of months”

https://www.anz.co.nz/content/dam/anzconz/documents/economics-and-market-research/2022/ANZ-BusinessOutlook-20220428.pdf

doesn’t mean much as I doubt listed retailers participate in these surveys

[Muse]

ANZ Business Outlook

“The retail sector is the most pessimistic about the outlook for profits and their own activity – consistent with the dramatic fall in consumer confidence over the past couple of months”

https://www.anz.co.nz/content/dam/anzconz/documents/economics-and-market-research/2022/ANZ-BusinessOutlook-20220428.pdf

doesn’t mean much as I doubt listed retailers participate in these surveys

Interesting takeaway from that - retailers are expecting cost inflation of 7.9%, but only expecting to raise prices by 6.4%. So that all things equal a gross profit margin compression of 1.5%. Layer ontop of that what happens in retail cycles - when there is a huge & sudden burst in demand (say like in FY21) companies A) don't need to discount as much and B) dont experience the same amount of investory write offs. Those two items directly impact GP margins and there are a handful of companies that saw serious lifts in GP from the previous year, which are now showing signs of stepping down in 1H FY22.

Couple that with inflation on overheads.

Those with already thick EBIT margins should weather the storm better than those operating on tiny EBIT margins, which could get seriously whacked over the next few half year reporting periods. Operating leverage is wonderful on the way up and awful on the way down.

Interesting opportunities ahead. Index inclusions always make plenty of money for those traders in early. My review of all the WHS trades today imply it was retail punters throughout the day and instos at close, so there could be more instos to come. Another alternative - we all saw what happened to gentailer prices after intos finished buying to complete the MCI green index inclusion requirements with prices falling back down. Could make for an interesting short - borrowing shares when the instos are buying at full steam, and delivering those shares back after half year releases are made.

[percy]

I am guessing that logistic issues and out of stocks are helping retailers move old stock.
This will save them having to discount it.

[Muse]

I am guessing that logistic issues and out of stocks are helping retailers move old stock.
This will save them having to discount it.

aye definitely.

and while logistics remain fiddly and costs elevated many retailers have gotten on top of their stockouts and built up solid inventory positions. briscoes went from just in time to just in case and the warehouse has built large inventories as at 31 january 2022. if sales disappoint the expectations that underpinned those purchase orders that's when you start to see elevated discounting & provisioning and depressed GP margins.

stats nz record actual retail stock value at quarter end by retail segment. Department store stocks were up 23% on PCP and clothing/footwear/accessories were up 13% on PCP as at 31 december 2021.

I think this is why we have seen GP margins unwinding in the most recent results & probably more to come.

IMO

[Waltzing]

Margins dropping; inflation on fire and thats why high DIV's might come under pressure and the SP grow more slowly than some are expecting.

[winner69]

Consumer Confidence not as bad as last report

ANZ Roy Morgan survey
https://watermarker.singletrack.io/ANZ_NZ_Roy_Morgan_Consumer_Confidence_off_the_floo r_but_still_very_subdued.pdf?data=DhZAW5pNirsgovBd ALYwomrNyXdpUKxDB7RxefLNZ79DdE3IwkjikhCo7OhrEBsP6U agmgj6B6pPDNlZhuh3q7PVWhJKgz1G4y3Pa2gtvjJmZXe1ybJX F8omQ%2F%2FM7zjwHyPlR%2B6bbE0q6n19105TIrVxvBKmLX9t iLzMPY9iyzQnk1MGWRb73DKGiR5jvigm18W4Ok%2B8j0MTSI43 Dh5fqMecsV%2BESuFxlrt2s91eBaUUCoc%2BYAQmmMvIju1mL8 N6lV3ONrId%2F%2BD9k18Cq82WmUIqKrOnHitnLvmuKP8vPAql LbOu10deg9cMGmuTCj0PFgn43LI245vNWOCJEKumzO%2BliOdX Drhqa8Z7i5ati1s2sfEHdh%2Fc9ZSY7B53bRuYepFzNzj8lx50 Ddx7TLKXLtZHzkb0uMTKOWJIY3Yw5bwjHEAXDKpAGYoc8GFKg% 2BWf0wKrzfz%2FDY%2FA3oii8RFYPUMhh6ud6Zm7f9zut2LKZ7 0CXxnUBmF9f%2BSAuqCHDWVFRgXoUlsYgXeVRFVixzBgxccu5U W%2FhxF1bAK94TIg7B5Ny1edNCUf6olBbYZ92ooKh83cV0JMQP fhtq1aEYkzSlRst9Up3KiD2Hqsje8Swe5wqa%2BVe9RaAf0g9p E8ZI4KSep93Fxs%2BP9QxFAdR0dpnQmQrEenl9iImaVHr5ZpwG AdgfJkIVaQ0fj9x%2BsU3ZTZVd6axk5Rz84FxQukYb9l3k3Fd6 KYh6v1JsddLnHJjv9v4wgIpczOkwbB2A4veyb6a2w1LLZOt3NU 12w2EyUap4ls%2FXIrzNuqAl44GhJjjmogmYEhAeNVDfoRBO2V q%2B%2FuieApNvgKqLHEhoixJ6NTJKFz1h8HSf3YJIUN%2BC7h 2nBZJHMhqS2zOoYx8OgZpY0ucsa2AkKj8vArgA9660zJlluwJG HV7UZU4HSlJqiB50o%3D&s3Url=https%3A%2F%2Fanz-singletrack.s3.ap-southeast-2.amazonaws.com%2FANZ_NZ_Roy_Morgan_Consumer_Confi dence_off_the_floor_but_still_very_subdued.pdf%3FX-Amz-Signature%3Dd686776a57b4daa48ea31ae20ad63df19e4bbb ba2ba53ee40d20430b53f58396%26X-Amz-Algorithm%3DAWS4-HMAC-SHA256%26X-Amz-Credential%3DAKIAZGZPZQBPX2SV22UN%252F20220428%252 Fap-southeast-2%252Fs3%252Faws4_request%26X-Amz-Date%3D20220428T000000Z%26X-Amz-Expires%3D86400%26X-Amz-SignedHeaders%3Dhost

[Muse]

Consumer Confidence not as bad as last report

ANZ Roy Morgan survey
https://watermarker.singletrack.io/ANZ_NZ_Roy_Morgan_Consumer_Confidence_off_the_floo r_but_still_very_subdued.pdf?data=DhZAW5pNirsgovBd ALYwomrNyXdpUKxDB7RxefLNZ79DdE3IwkjikhCo7OhrEBsP6U agmgj6B6pPDNlZhuh3q7PVWhJKgz1G4y3Pa2gtvjJmZXe1ybJX F8omQ%2F%2FM7zjwHyPlR%2B6bbE0q6n19105TIrVxvBKmLX9t iLzMPY9iyzQnk1MGWRb73DKGiR5jvigm18W4Ok%2B8j0MTSI43 Dh5fqMecsV%2BESuFxlrt2s91eBaUUCoc%2BYAQmmMvIju1mL8 N6lV3ONrId%2F%2BD9k18Cq82WmUIqKrOnHitnLvmuKP8vPAql LbOu10deg9cMGmuTCj0PFgn43LI245vNWOCJEKumzO%2BliOdX Drhqa8Z7i5ati1s2sfEHdh%2Fc9ZSY7B53bRuYepFzNzj8lx50 Ddx7TLKXLtZHzkb0uMTKOWJIY3Yw5bwjHEAXDKpAGYoc8GFKg% 2BWf0wKrzfz%2FDY%2FA3oii8RFYPUMhh6ud6Zm7f9zut2LKZ7 0CXxnUBmF9f%2BSAuqCHDWVFRgXoUlsYgXeVRFVixzBgxccu5U W%2FhxF1bAK94TIg7B5Ny1edNCUf6olBbYZ92ooKh83cV0JMQP fhtq1aEYkzSlRst9Up3KiD2Hqsje8Swe5wqa%2BVe9RaAf0g9p E8ZI4KSep93Fxs%2BP9QxFAdR0dpnQmQrEenl9iImaVHr5ZpwG AdgfJkIVaQ0fj9x%2BsU3ZTZVd6axk5Rz84FxQukYb9l3k3Fd6 KYh6v1JsddLnHJjv9v4wgIpczOkwbB2A4veyb6a2w1LLZOt3NU 12w2EyUap4ls%2FXIrzNuqAl44GhJjjmogmYEhAeNVDfoRBO2V q%2B%2FuieApNvgKqLHEhoixJ6NTJKFz1h8HSf3YJIUN%2BC7h 2nBZJHMhqS2zOoYx8OgZpY0ucsa2AkKj8vArgA9660zJlluwJG HV7UZU4HSlJqiB50o%3D&s3Url=https%3A%2F%2Fanz-singletrack.s3.ap-southeast-2.amazonaws.com%2FANZ_NZ_Roy_Morgan_Consumer_Confi dence_off_the_floor_but_still_very_subdued.pdf%3FX-Amz-Signature%3Dd686776a57b4daa48ea31ae20ad63df19e4bbb ba2ba53ee40d20430b53f58396%26X-Amz-Algorithm%3DAWS4-HMAC-SHA256%26X-Amz-Credential%3DAKIAZGZPZQBPX2SV22UN%252F20220428%252 Fap-southeast-2%252Fs3%252Faws4_request%26X-Amz-Date%3D20220428T000000Z%26X-Amz-Expires%3D86400%26X-Amz-SignedHeaders%3Dhost

thanks winner. aye - now what only 2nd worst in history - phew! lol
link doesn't work anymore but I checked it out directly
the point they make about high retail inventory levels echo's what I said above in 257

[LaserEyeKiwi]

Kiwis are holding a record amount of cash. Once consumers get over their pessimism and realize no one is losing their jobs, there probably will be another massive splurge.


Overall bank account balances held by households swelled by +$2.8 bln in March, and the third fastest month-on-month expansion ever. They are up +14.5 bln in a year to $219.3 bln and a new all-time record.

[LaserEyeKiwi]

International shipping costs continue to decline…BUT the NZ dollar fell quite a bit this week vs US dollar so the shipping costs for NZ companies highly likely increased this week (not to mention the cost of imported goods)

13753

[Greekwatchdog]

Kiwis are holding a record amount of cash. Once consumers get over their pessimism and realize no one is losing their jobs, there probably will be another massive splurge.

Yes on holidays. I have just booked mine. Travel Agent tells me they can't keep up with deluge coming in..

[Ggcc]

Yes on holidays. I have just booked mine. Travel Agent tells me they can't keep up with deluge coming in..
Mine is next month I can’t wait.

[Beagle]

Kiwis are holding a record amount of cash. Once consumers get over their pessimism and realize no one is losing their jobs, there probably will be another massive splurge.
Overall bank account balances held by households swelled by +$2.8 bln in March, and the third fastest month-on-month expansion ever. They are up +14.5 bln in a year to $219.3 bln and a new all-time record.

Impressive. I think its very easy to forget that consumers who've been cooped up have hoarded vast amounts of cash. Also huge amounts of talk about how mortgage holders will feel the squeeze completely ignores the fact that a year or so ago people with money on term deposit were earning almost nothing but can now very easily earn 3% which is more than $6 Billion per annum income on $219 Billion on deposit. Retiree's will be out spending and enjoying their money as Omricon continues to ease.

[Greekwatchdog]

Good on ya GGCC. Hope you have a great time. Mine is July, 11 weeks to go

[LaserEyeKiwi]

Weekly update:

13755

[winner69]

Thanks LEK

When things go well for retail stocks (in general) like last week MHJ seems to disappoint

Maybe 'consumables' / 'necessities' v 'discretionary' lol

[Waltzing]

Recession coming in retail?

Businesses slammed to the wall as customers close their wallets - NZ Herald (https://www.nzherald.co.nz/nz/businesses-slammed-to-the-wall-as-customers-close-their-wallets/ZB5HU2GS5AIUUB3SVDTVRNOT5I/)

MHJ Canary in the coal mine.

But its international and AUS and Canada small profit in NZ.

Doubtful in this environment they will try for an acquisition.

No business plan for NZ from GOVT going forward just bigger central control.

Has to come home to roost at some point for NZ.

USA growth slowing and CHMOA no plan either except infrastructure that they cant possible create anymore cities with no one in them. Bridges to now where and in NZ committees and Fake shares for councils.

Just show they havnt got a clue about whats needed and retail needs a growing private sector.

Retail needs a vibrant economy maybe one or two years of DIV's left for NZ at these levels.

[LaserEyeKiwi]

Recession coming in retail?

Businesses slammed to the wall as customers close their wallets - NZ Herald (https://www.nzherald.co.nz/nz/businesses-slammed-to-the-wall-as-customers-close-their-wallets/ZB5HU2GS5AIUUB3SVDTVRNOT5I/)

MHJ Canary in the coal mine.

But its international and AUS and Canada only.

Doubtful in this environment they will try for an acquisition.

seems to confirm bank data mentioned above - Kiwis have stockpiled a record amount in cash savings, and credit card balances are also at very low levels owed. So it isn’t like consumers don’t have the money to spend at retailers, they are just holding off spending it for now.

[Waltzing]

Yep but with a War in europe and inflation on fire winter could stop SP from rising another farther.

Or slow the SP rise that makes these stock's tradeable around DIV and wave patterns emerging.

In environments like these some stock become tradable and others as investments.

Retail is cyclical unless propped up by something like GDP brought forward.

[winner69]

A good indication of retail in NZ from Woolworths (essentially Countdown)

Sales for March quarter were up 3.8% and they said -

Woolworths said the NZ sales were driven by higher average selling prices, which rose 3.6%, with the volume of transactions shrinking 9.7% and comparable item volumes contracting 2.8%.

So sold less stuff but took more $ through the tills

[Waltzing]

Bike retailers could be in for a windfall and the tax payer on the hook for BIKES!!!! The problem is that NZ never designed its urban environment for bikes. Holland started the process many many decades ago. Anyone who live in amsterdam will know you got a bike to ride not a car when you arrived.

T7 could benefit from this.

Auckland's $2 billion cycle plan: Compulsory bike training in schools and bike subsidies - NZ Herald (https://www.nzherald.co.nz/nz/aucklands-2-billion-cycle-plan-compulsory-bike-training-in-schools-and-bike-subsidies/BPPM22OTKGQPC7ZOCEKJG6HYAI/)

Kiwi's are unable to learn to ride bikes on there own. Must be a completely stupid population that needs instruction on bikes.

[bull....]

a few retailers in aus giving updates saying shipping delays and lockdowns in certain markets means they are not providing guidance for further quarters at this point in time

[LaserEyeKiwi]

Stats NZ just released unemployment (still at 3.2%) and wage stats (+3%).

Interesting tidbit, that despite the recent very low consumer confidence figures, “Job confidence” (the likelyhood of keeping ones job in the next 12 months) is at what looks like an all time high.

So people are worried about purchasing big items, but not at all worried about losing their jobs.

[winner69]

Stats NZ just released unemployment (still at 3.2%) and wage stats (+3%).

Interesting tidbit, that despite the recent very low consumer confidence figures, “Job confidence” (the likelyhood of keeping ones job in the next 12 months) is at what looks like an all time high.

So people are worried about purchasing big items, but not at all worried about losing their jobs.

Unadjusted LCI about 5%

[Muse]

Unadjusted LCI just under 5%

aye stats nz compile more labour index stats than you can shake a stick at.

From ANZ - who I thought framed it well in the update they just released

<<<
Wage growth has increased markedly, with productivity-adjusted private sector labour costs up 3.1%y/y (2.8% previously), unadjusted labour costs up 5.0%(4.5% previously), and average hourly earnings lifting 5.3% y/y (4.1% previously). All three wage growth figures are clearly still far behind Q1’s 6.9% CPI inflation print – but are accelerating faster than we expected.

Forward looking indicators of labour demand remain elevated. Employment intentions in our Business Outlook survey, online job ads data, and an array of capacity indicators in the Q1 QSBO all show that domestic labour demand is very strong – even if Omicron disruption may have shifted some hiring from Q1 into Q2. But the labour market is just not capable of meeting demand right now – especially with the border reopening still in progress.

So we should continue to see firms bid up wages over 2022 in the battle to attract and retain talent. Should the tightening Australian labour market lure a significant number of Kiwis overseas (a serious risk), then the labour market may tighten even further.

This is a highly inflationary process, given that productivity is not rising as quickly as wages. That means firms will have to pass on higher wages in the prices they charge – potentially generating an ongoing cycle of higher wages and higher prices. In turn, that would mean any benefit workers may expect from a tight labour market is simply eaten away by inflation. So the RBNZ needs to get ahead of this pernicious cycle by continuing to quickly raise the OCR (including a second 50bp hike in May). It won’t be fun, and highly indebted households could struggle. But letting domestic inflation spiral would have far worse consequences.
>>>

[LaserEyeKiwi]

Worldline April retail spending in NZ:


Spending through Worldline's payments network amongst the rest of the core retail sector was $2.9 billion in April - up 4.1 per cent on the same time last year and 15.4 per cent on April 2019.

Worldline said these growth rates were similar to those seen in the previous five months.


"Spending in the rest of the Core Retail sector, which overall is far larger than Hospitality, is maintaining a growth momentum at present, at least in terms of total dollars being spent," Putnam said.


He said the average value of a payment transaction had increased since 12-months ago - consistent with generally higher prices.
The average value of April transactions through all core retail merchants in Worldline's network (excluding Hospitality) was $52.84, a 8.9 per cent increase since April last year and 11 per cent since April 2019.


"In April this year we saw spending at merchants selling discretionary products – such as clothing and footwear, or electrical goods – showing growth patterns very similar to earlier months, suggesting that any inflation-induced cutbacks in spending have been modest so far."

[Bjauck]

Bike retailers could be in for a windfall and the tax payer on the hook for BIKES!!!! The problem is that NZ never designed its urban environment for bikes. Holland started the process many many decades ago. Anyone who live in amsterdam will know you got a bike to ride not a car when you arrived.

T7 could benefit from this.

Auckland's $2 billion cycle plan: Compulsory bike training in schools and bike subsidies - NZ Herald (https://www.nzherald.co.nz/nz/aucklands-2-billion-cycle-plan-compulsory-bike-training-in-schools-and-bike-subsidies/BPPM22OTKGQPC7ZOCEKJG6HYAI/)

Kiwi's are unable to learn to ride bikes on there own. Must be a completely stupid population that needs instruction on bikes. Yep they should be left to kill and maim themselves. No need for road safety instruction.

[winner69]

Retailwatch April month sales data

Quite interesting

[Bjauck]

Retailwatch April month sales data

Quite interesting

It is good to see people are not forgetting alcohol when they go shoeless on holiday to forget the looming negative equity in their expensive houses...

[Waltzing]

Everyone was out holidaying.."end less summer"

[Davexl]

Well at least Consumer Durables / Non-Durables held up in today's US Market Rout - proving Defensiveness...but not so much in NZ, so far...

(https://money.cnn.com/data/markets?utm_source=optzlynewmarketribbon)https://money.cnn.com/data/markets?u...ewmarketribbon (https://money.cnn.com/data/markets?utm_source=optzlynewmarketribbon) (https://money.cnn.com/data/markets?utm_source=optzlynewmarketribbon)

[LaserEyeKiwi]

It is good to see people are not forgetting alcohol when they go shoeless on holiday to forget the looming negative equity in their expensive houses...

Negative equity? The average kiwi homeowner has 75% equity in there house as of last year. The only people with negative equity would be a very tiny percentage who bought at the peak of the market over the last 6 months with a very low deposit of 10% or less. That is well under 1% of the population. Even a 20-30% drop would only take house prices back to where they were pre-pandemic.

[LaserEyeKiwi]

Weekly update:

13775

[Beagle]

Good work LEK, keep it up. Year to date change relatively even between them now.
Much better sector to be invested than the retirement sector this year that's for sure :eek2:

[Waltzing]

WHS heading down again.. thank you.. please keep selling... terrible stocks retail... shocking ...

[LaserEyeKiwi]

Added comparison to Dec 31st 2019, to get a gauge of returns to the pre-Pandemic level:

13778

[Beagle]

WHS heading down again.. thank you.. please keep selling... terrible stocks retail... shocking ...

LOL You're making it too obvious you want some more.

[Waltzing]

What ? more !!!

In this bear market there has to be some whopping big rally's.

ARG sub 1.20? gosh cant wait for inflation to die down in a few years time. 2 to 5 years.

dont you just love a good dear , i mean bear market...

[Muse]

What I can't get over is how bullish Briscoes' 1Q 2023 report was...one that was clearly price sensitive as it contained earnings guidance but not marked as price sensitive lol

Group sales were up 1.77% - which is respectable in this environment - and they noted some pressures on GP % margins coming through, but confident they would retain a large portion of the 633bps margin expansion seen over the last two years. Some boasting there, and rightfully so, as that is an off the charts exceptional operational performance.

But the bit that caught me off guard was that Briscoes are on track to overachieve last years record NPAT, even if the seasonal phasing is different. Briscoes operate a 31 January financial year, so their FY22 year neatly missed most of the troubles that other retailers are now encountering and reporting on. That to me is extraordinary, as FY22 was a standout breakout performance. Although nearly every year is that for briscoes.

Not sure if Rod is being particularly bold in making that statement given briscoes is experiencing negative real sales growth (ie sales after inflation), or if some of the recent initiatives are bearing fruit, or has some new ones up his sleeve that are not yet disclosed.

I also wouldn't be surprised if he had to backtrack as beating FY22 NPAT seems too good to be true with the issues at hand. Low single digit revenue growth and margin compression don't scream outperformance to me. And Briscoes are making that full year guidance call after only 1 quarter?

I often get (sometimes pointed) queries why I bother posting on retail given I am bearish. One, its tangible and I enjoy it, and think I understand it. Two, Briscoes is/was one of my top 2 NZX holdings, so I keep my ear to the ground. Briscoes pedigree is undeniable and having built exceptional margins should put it in good stead for a downturn, which I think is coming, although I personally I don't believe they will meet their new guidance. The other is Heartland, who owns a not insignificant stake in harmoney, which is why I initially started following them closely as I wanted to understand the implications from the position.

FYI here is segmented rolling 3 month sales taken from Datamine Retailwatch. It is better quality than the paymark/worldline retail spending stats as it does a better job at capturing online sales. If you took paymarks data and segmented it some of the underlying retail channel would look far more diabolical than if grossed up for the full macro picture. Paymark are losing share of total sales so their data is becoming less reliable. Datamine Retailwatch is free but you have to sign up.


13779

Lots of people like to quote paymark data but I think if you do, its wise to scroll to the bottom of the hyperlink below, click to the second page where you can segment spend by type, and compare yoy and week on week sales. People often quote topline figures but when that includes things like hospo, fuel, groceries, and travel it distorts the overall picture. Peel those back and you see something else.

https://www.paymark.co.nz/consumer-spend

The data to me is clear things are unwinding. I'm not a doomsday merchant as some say I am - I don't see a shocker of a result coming out for our retailers over the next half year report period, but I do think things are going to get a lot harder a lot faster over the next 4 half year reporting period too. And I don't think the next 1-3 year consensus estimates for npat and DPS remain valid baselines either.

Some companies are better than others, and will outperform the macro data. Briscoes clearly have. Sales of electronics are well suited to online which will benefit when covid spreads, which is why we are seeing good JB HI FI sales and presumably similar 2H FY22 noel leeming sales. and I think WHS's mini foray back into cheap groceries is a highly worthy experiment. But none the less, I think the tide is on its way back out, and for cyclical companies, gravity always wins over operational nouse.

In the short term - remainder of CY2022 - I'm more mindful/worried of margin compression that sales growth, the later of which is buffered by high levels of inflation. IE volumes are declining but with inflation at 7% easy to keep things running relatively steady

DISC also own small stakes in MHJ and KMD picked up in april 2020

[winner69]

Good post FM

I reckon ‘weakness’ started to appear in NZ retail spending last June/July ….before omicron hit. That reckon based on underlying trends

[Beagle]

Carnage on Wall street again but I couldn't help noticing Walmart up more than 1% and that's on a PE in the high 20's and consumer staples generally were up marginally as well.

I wouldn't want to own pure consumer discretionary like Kathmandu for all the tea in China but consumer staples like WHS will do just fine.

[Waltzing]

more more a seas of red please.

Well with no war declared because it bad for stealing more money the markets are really in a good place.

A sell off to adsorb all that debt brought forward as GDP.

Bad for financial ministers hoping that the sugar would last longer.

Should see some more sell off's but really might see some big rallies too.

It was a big summer for surfing! One of the biggest in years as lots of "girls cant surf" turned out to prove the boys wrong.

The sell off could be in for a while.

[winner69]

Stats NZ Card Spend for April month

Seasonally adjusted debit and credit card spending rose by $551 million (7.0 percent) in April, [/B]Stats NZ said today.

That's pretty good

https://www.stats.govt.nz/news/card-spending-continues-to-rise-in-april

[Muse]

Stats NZ Card Spend for April month

Seasonally adjusted debit and credit card spending rose by $551 million (7.0 percent) in April, [/B]Stats NZ said today.

That's pretty good

https://www.stats.govt.nz/news/card-spending-continues-to-rise-in-april

Reaction from ASB economics
https://www.asb.co.nz/content/dam/asb/documents/reports/economic-note/apr-22-card-spend.pdf

[winner69]

Reaction from ASB economics
https://www.asb.co.nz/content/dam/asb/documents/reports/economic-note/apr-22-card-spend.pdf

Agree with them spending patterns are pivoting towards pre-COVID-19 norms. .... mentioned that earlier this morning

Love seasally adjusted numbers ---- headline up 7.0% is HUGE .... reality is +2.9% v April last year

[Waltzing]

Yes but the market today is selling. Panic mode.

[Sideshow Bob]

Agree with them spending patterns are pivoting towards pre-COVID-19 norms. .... mentioned that earlier this morning

Love seasally adjusted numbers ---- headline up 7.0% is HUGE .... reality is +2.9% v April last year

Lies, dam lies and statistics.....

Use whatever sounds best for your purpose.

[nztx]

Well folks - Robbo is trying hard to not inject any more into the bowl

Rising costs, inflation, interest rates, same old rental accom shortages, higher fuel costs, the top etchelons lapping up 39%, if they can't skillfully work to miss it, etc etc

Sharemarkets in freefall - Housing teetering the downhill prospect - the excess Covid print up has to be sucked up & in somehow

Could the R word be a very distinct possibility in our local goldfish bowl .. with it totalling a further swathe
of delicately hanging Covid damaged business into the Clapper's yard for cents in the dollar ? ;)

Where do current signals point as things get tighter, conditions harder & the blind occupants on the hill
continue to remain completely blind to what their ruinous reign is finally likely to inflict on many ? :)

That wouldn't be a surprise however, but a repeat of ignore & hope it goes away as per last time they occupied the driving seats deaf to growing screams :)

And what this spells for retail on the end of the tea towel whipping with higher purchase costs ?

[Habits]

Def no surfing in Hamilton unless it is on the interweb.

The Warehouse sells groceries through the interweb .... bingo. With all the talk of neutralizing the supermarkets and their super-profits it is no wonder whs sp is doing well, relatively speaking.

[Beagle]

Long but interesting article on how disingenuous Countdown's price freeze is. https://www.nzherald.co.nz/business/the-spinoff-a-deep-dive-into-the-countdown-price-freeze/6XTLLJIR4RHVZ6TO4SRDXJJ5UM/

For me the highlight was price freeze on "essential" item fresh Salmon @ $90 a kilo. Yeah that'll really help struggling families cope with the cost of living because this is so "essential" lol Why don;t they do something really worthwhile and freeze the price of an affordable fish like Hoki ?

Couldn't help noticing Salmon at New World this evening...just a "slight" price difference lol https://www.newworld.co.nz/shop/product/5110200_kgm_000nw?name=bluff-salmon-fillet-skin-on

Just as well there are some companies trying to make a difference for consumer staples like WHS are trying to do.

[Waltzing]

KMD selling a bio degradable jacket....

have to have one...j'ai

[Beagle]

KMD selling a bio degradable jacket....

have to have one...j'ai

Better not get it wet :lol:

[Waltzing]

retail holding up well must be Winners(n) posts....

dont know if hamilton KMD has the jacket yet.

[nztx]

Better not get it wet :lol:


might need a fast waltz to dodge the raindrops

perhaps Winner could help out on modifying the technique and finding something
in the store to repel the drops ;)

[LaserEyeKiwi]

MHJ & KMD Taking an absolute hammering this week. WHS gave quarterly update this morning which seemed alright.

Have added trailing 12 month EPS & PE ratio columns:

(best to ignore EPS & PE ratio for KPG, as that includes property revaluations)

13807

[Waltzing]

"might need a fast waltz to dodge the raindrops"

the top athlete dancers in the world and an Italian trained in the UK is perhaps considered a world authority use gravity to create momentum and this allows for an effortless movement.

however even this world beating technique would not be enough to avoid getting wet while the pivoting athlete generates centrifugal forces.....

dancing in the rain ....


https://www.youtube.com/watch?v=P9R96ZoWJBU

[LaserEyeKiwi]

Shipping costs continue their steady if slow move lower this week:

13808

[nztx]

Friday the 13th certainly looks like another bloodbath on NZX, no matter which way you waltzed it ;)

WHS one of the few relatively unscathed, but will it hold going forward ? ;)

[LaserEyeKiwi]

Weekly update - have added EPS, PE ratio, Gross Dividend & Gross dividend yield (All trailing figures).

13809

[Beagle]

Good work mate, keep it up. Interesting to note consumer discretionary, MHJ and KMD are being hit the hardest. I expect that trend to continue for the foreseeable future. Clydesdale horses couldn't drag the Beagle into buying either of them at present.

[Habits]

Weekly update - have added EPS, PE ratio, Gross Dividend & Gross dividend yield (All trailing figures).

13809

Thanx LEK. The highest gross yield is WHS with better than average prospects and addition to NZ50. That probably helps to explain its SP performance this week, though a paltry 1.5 percent

[Waltzing]

US RETAIL holding up under inflationary pressures. But for how much longer.

[LaserEyeKiwi]

From Axios:

Consumers continued to spend in April, with retail sales (https://www.axios.com/2022/03/31/inflation-adjusted-spending-falls-in-february) jumping 0.9% from the prior month, according to government data (https://www.census.gov/retail/marts/www/marts_current.pdf) released on Tuesday.
Why it matters: Shoppers aren't pulling back on spending even as prices soar at the fastest pace in 40 years (https://www.axios.com/2022/05/11/inflation-remained-high-april). This is a good sign for the American economy amid fears of a coming recession as inflation rages.


Retail sales rose 8.2% from a year ago, a period when inflation jumped by 8.3%.
Stripping out spending on gasoline, retail sales were even stronger, rising 1.3% from the prior month.

Details: Consumers upped spending at restaurants and bars, and spent more on clothing, furniture and cars.


Spending on gas fell 2.7% compared to March, when gas prices rose as Russia invaded Ukraine.

The bottom line: Economists are keeping a close eye on consumer spending for signs of how they are grappling with soaring prices. So far, activity remains robust.
What to watch: Walmart, the nation's biggest retailer, says it sees some signs that cash-strapped consumers are adjusting their behavior because of higher prices.


CFO Brett Biggs told CNBC (https://www.cnbc.com/2022/05/17/walmart-wmt-earnings-q1-2023.html) on Tuesday that the company is seeing more sales of half-gallons of milk and its private brand of lunch meat. The company expects inflation to continue to crimp its business this year.

[winner69]

From Axios:

Consumers continued to spend in April, with retail sales (https://www.axios.com/2022/03/31/inflation-adjusted-spending-falls-in-february) jumping 0.9% from the prior month, according to government data (https://www.census.gov/retail/marts/www/marts_current.pdf) released on Tuesday.
Why it matters: Shoppers aren't pulling back on spending even as prices soar at the fastest pace in 40 years (https://www.axios.com/2022/05/11/inflation-remained-high-april). This is a good sign for the American economy amid fears of a coming recession as inflation rages.


Retail sales rose 8.2% from a year ago, a period when inflation jumped by 8.3%.
Stripping out spending on gasoline, retail sales were even stronger, rising 1.3% from the prior month.

Details: Consumers upped spending at restaurants and bars, and spent more on clothing, furniture and cars.


Spending on gas fell 2.7% compared to March, when gas prices rose as Russia invaded Ukraine.

The bottom line: Economists are keeping a close eye on consumer spending for signs of how they are grappling with soaring prices. So far, activity remains robust.
What to watch: Walmart, the nation's biggest retailer, says it sees some signs that cash-strapped consumers are adjusting their behavior because of higher prices.


CFO Brett Biggs told CNBC (https://www.cnbc.com/2022/05/17/walmart-wmt-earnings-q1-2023.html) on Tuesday that the company is seeing more sales of half-gallons of milk and its private brand of lunch meat. The company expects inflation to continue to crimp its business this year.


Good stuff eh .... but Walmart says costs etc are eating into profits

Top line good .... bottom line not so good

[Waltzing]

Winner(n),which of the listed NZ companies would parallel to Walmart?

Walmart is the big discussion point on CNBC this morning.

[winner69]

Winner(n),which of the listed NZ companies would parallel to Walmart?

Walmart is the big discussion point on CNBC this morning.

Yes Dorothy .... good question

[Waltzing]

Winner(n) are we looking at a comparison to WH Group?

https://www.walmart.com/

[LaserEyeKiwi]

Winner(n) are we looking at a comparison to WH Group?

https://www.walmart.com/

I thought that would be the obvious comparison, although Walmart has a fairly large grocery component as a share of sales.

Remember though that US retail sales year on year comparisons will look somewhat different to the rest of the world, as a year ago they had huge stimulus checks sent to almost every American adult (the “helicopter” free money payments - $2000 per person in late Q4 2020 through Q1 2021), along with a very generous child tax credit payment of $300 per child per month (which finished at end of 2021).

Your typical 2 adult 2 child family in America received over $10,000 in extra free money from the US government in 2021. Mind blowing.

New Zealand, Australia, Canada etc did not have these sort of payments a year ago, our retail spending surge was more driven by diverted discretionary funds caused by lockdown closures (you literally couldn’t spend your money like you used to), no international travel availability, and also record low mortgage rates & juiced up wealth effect from housing.

[Waltzing]

LEK what your saying is that the 2 causes of excess house hold balance sheet reserves is similar just from different sources.

Still results in a similar increase of spending. Perhaps WHS is still going to be hit but to what percentage we cant yet see?

[LaserEyeKiwi]

LEK what your saying is that the 2 causes of excess house hold balance sheet reserves is similar just from different sources.

Still results in a similar increase of spending. Perhaps WHS is still going to be hit but to what percentage we cant yet see?

Not to anywhere near the same degree. The average in increased cash levels for NZ households was nowhere near the money that rained down on every USA household. (The wealth effect from rising NZ house prices in 20/21 didnt put any actual “free money” in consumer pockets). But yes would agree that there indeed was some impact that isn’t present this year.

Important to remember that Walmart still had an increase in revenue year on year despite the absence of consumer stimulus - there drop in profits was due to higher costs.

also Walmart was trading at a 30x earnings multiple before todays report, and trades at a 1.7% dividend yield.

Our listed retailers are trading at an average 11x multiple and 8% dividend yield.

An American investor would probably assume all our retailers are heading for bankruptcy or something, considering how cheap a price they trade at by comparison.

[LaserEyeKiwi]

Slightly off topic, but I went bottom trawling a little in the US retail names last week, picked up some Allbirds stock near it’s all time lows ($3.90). Already up 26% in a week. Not for the faint hearted though.

[Beagle]

Not to anywhere near the same degree. The average in increased cash levels for NZ households was nowhere near the money that rained down on every USA household. (The wealth effect from rising NZ house prices in 20/21 didnt put any actual “free money” in consumer pockets). But yes would agree that there indeed was some impact that isn’t present this year.

Important to remember that Walmart still had an increase in revenue year on year despite the absence of consumer stimulus - there drop in profits was due to higher costs.

also Walmart was trading at a 30x earnings multiple before todays report, and trades at a 1.7% dividend yield.

Our listed retailers are trading at an average 11x multiple and 8% dividend yield.

An American investor would probably assume all our retailers are heading for bankruptcy or something, considering how cheap a price they trade at by comparison.

Well said. We need to keep what's happening in retail into the perspective that many are already trading at historically low multiples.
What if the recession is not as long as deep as the market is currently pricing in ?
Spindy and Grant might throw money around like its Christmas come early tomorrow.

[Waltzing]

Well researched LEK.

The US economic web site is always a good source of data.

Now lets see what the Aussi economy does for retails in the second QTR.. have to wait a bit of course.

[Waltzing]

CNBC more result coming out , next Target.

Missed earnings due to big increases in transport costs.

Sale of travel related products up 50%.

Top line sales number holding up.

Stock selling off pre market.

[bull....]

CNBC more result coming out , next Target.

Missed earnings due to big increases in transport costs.

Sale of travel related products up 50%.

Top line sales number holding up.

Stock selling off pre market.

yep walmart , now target a trend starting it will spread to nz retailers. a savage reckoning is coming

[winner69]

CNBC man says about the collapse in retailers shareprices ….luck it won’t happen in NZ

”You know it's bad when consumer staples are trading like small cap biotech”

[Waltzing]

Carnage on the DOW and maybe more to come as the FED hikes into the 3's

CNBC "Systematic selling across the board"

[Davexl]

S&P500 down just over 4% - big hit. Retailer result summing up CNBC

https://www.cnbc.com/2022/05/18/what-walmart-target-home-depot-and-lowes-tell-us-about-the-economy.html

[Rawz]

All retailers need to be trading on <9 p/e i reckon. HLG and Bris not looking good here

[Beagle]

I wouldn't go along with that as what we are talking about in FY22 or FY23 is probably trough year earnings.
I think early teens is okay.

[Muse]

Not surprised to see what is happening to US listed retail share prices (Walmart down 23% since mid April) given the margin compression arising from inflation on fixed costs. These big operationally leveraged retailers like the WHS operating on slim margins are very sensitive on inflation on fixed costs when sales are flatling to slightly declining. And with everyone so focused on what is happening to revenues, index inclusion, and mgmt talking up grocery I think the market has missed the warning signals on what is happening on costs.

First the WHS still hasn't issued guidance despite knowing over 3/4ths of annual sales and margin and fixed cost base, so that would imply even to management the trading environment for the 4th quarter (usually the 2nd largest by sales given winter programmes) is materially uncertain. Second, looking at the 1H FY22 result, segmental overheads (CODB) by average store during the period rose 5.5% on the previous year, and this is after I deducted a prorata allocation of the $11m in extra covid costs (rat tests etc), and keeping corporate and the market overheads separate. Third, the company appears to have pulled its foot off 'the markets' accelerator in the third quarter, whose growth has been fueled by a huge spend in customer acquisition costs which are a variable cost but get recorded in the CODB line. Other revenue (being the difference between the 4 brands and total revenue) includes other group operations revenue, intercompany eliminations, and the market (which 1day has been amalgamated into). For instance, FY22 2nd quarter 'other revenue' was up 53% on Q2FY22 (no doubt driven in large part to the market), but in q3 actually fell 16% yoy. Given the market costs are significant and a have degree of variable costs, is this a warning sign that mgmt have grown alarmed at CODB run rates and slammed on the breaks to minimise ongoing loses?

The WHS is so operationally leveraged that its bottom line is very sensitive to small changes in assumptions, much less so in other retailers that have already high margins. Despite that, I see some meaningful downside to the consensus NPAT of $100m. The number spitting out of my spreadsheet is currently ~$85 but quite easy to see $80-$90m, and in some scenarios less than $80m. No wonder mgmt haven't issued guidance, although they have far more info that us! I wouldn't be surprised if they hit $90m, or $80m. I'd be mildly surprised if they hit $100m, but who knows.

I currently see Q4 sales of ~$794m, built up by assumptions on changes in sales per quarterly average store (by brand) vs q4 FY21. Even though YTD gross margins are running well down on the prior year, Q3 was in line with the previous period so I assume GP margins by segment in the 2nd half are identical to the previous year by brand. This is quite a critical assumption as Q4 typically has the highest margins during the year (winter sales higher margin and movements in inventory provisions at year end).

Fixed costs is the hardest. I simply assumed the rate of inflation per average store (segmented by each individual store type) remained consistent in the 2nd half. I had already backed out the $11m in 1H covid costs, but I did make an explicit assumption that 33% of that would reoccur in the 2nd half.

The tricky thing is we don't know if that is a valid assumption. I assume rat tests etc have come off. But the covid costs could be much higher given many employees will have gotten covid and be off sick, getting paid, and other workers being paid overtime or extra staff employee to cover. It remains a very chunky and real downside risk to my back of the envelop and I make no specific assumption. Finally, I assumed 'other' unallocated CODB remains more or less at last years number given mgmt might be slowing the markets to stop losses. But it could be a lot less or more, the company simply doesn't do a very good job at given granular enough financial information/P&Ls for corporate overheads, the markets, and other operations. And maybe mgmt aren't taking their foot off the pedal on 'the market' - and q3 other revenue was just an anomaly.

That gets me to a 2H F22 CODB of $523m. It's a $10.2m drop from 1H FY22. The previous year, CODB only dropped $4m in the second half from the first.

2nd half sales of $1,565.7, GP of $571m (36.6% margin), CODB of $523.9m, retail EBIT of $47.2m, some IFRS adjustments later to get to stat PBT of $49.9m, 28% tax rate, 2nd half NPAT of $35.9m. Note, I assume that the WHS for the first time in 5 years doesn't spend money on restructuring costs (they spent $97m over the last 5 years, or $19.4m on average! - and they still like to back it out)

Anyway - none of this is financial advice - just some musings based on trends I've seen - and I reckon its very important for people to do their own research. I am sure I will be miles off and this is but a snapshot in time and no doubt in a month or two I'd have done the assumptions much differently as new information comes out, but having done the work still think its a worthy to contribute it. I think if I had to guess what changes I'd make in the future, my sales might be $10m-$20m higher (more cheap groceries), Q4 GP a bit lower (pantry loss leaders), and fixed costs a tad higher (extra staff) - not unsure how much difference it would make to the bottom line.

And as for my disclosure I have no financial interest in the company, long or short.

I still see it as a credible result - one of the highest the company has achieved in recent years.

[Grimy]

Thanks FM. Appreciate your thoughts. And all the time you've put into it.

[Muse]

Thanks FM. Appreciate your thoughts. And all the time you've put into it.

Don't get me wrong I still think the WHS is a solid company. It's got great cashflow, mgmt have spent a lot in restructuring costs ($19m pa) but its GP margins have improved over the last two years. Some of that is the transition from Redsheds doing lots of promotions to a every day low pricing model, but most of it in my view from a huge rationalisation in SKU's. That gives better rebates to the company and less aged stock. Clearly the company has done a good job at improving its CRM and warehouse management software with inventory provisions as a % of finished retail goods falling from 9.7% at 1 august 2020 to 4.3% at 30 january 2022. In FY21 alone, the movement in inventory provisions alone added $15m to the warehouse GP and PBT. It needs to continue to rationalise its footprint as it continues to lose a bit of marketshare so further restructuring costs probably needed in the future, but one day it will be right sized, just don't know when that is. and the GP expansion probably not entirely sustainable but I'd wager a majority of it is.

[Beagle]

I still see it as a credible result - one of the highest the company has achieved in recent years.

$90m would be a current year PE of just 12.5 in these extraordinarily challenging times. Very resilient and a lot to be admired.
Trading conditions won't always be this tough.
I'm very pleased to see them winding back their advertising on "The Market" That's a ~ $25m a year black hole in my opinion.

[Muse]

$90m would be a current year PE of just 12.5 in these extraordinarily challenging times. Very resilient and a lot to be admired.
Trading conditions won't always be this tough.
I'm very pleased to see them winding back their advertising on "The Market" That's a ~ $25m a year black hole in my opinion.

well it's a guess of mine - the implied 'other' revenue in the Q3 report includes a chocolate factory of some sort (what the...), 1day (going backwards fast but very low margin - hopefully gets shut down), the markets, other group operations, and eliminations - so a whole lot going on and I am probably guilty of reading too much of one bit of data. If they are pulling back it would give me some comfort that nick isn't too gungho over it, if I'm wrong and they are still ramping it up in this environment would be disappointing as offsets all the goodwork they have achieved on margins in the core business over the last several years.

who knows it's all a big guess

as I say whether its $80 or $85 or 90 or 95, its still a lot more than the previous 5 years.

[Beagle]

well it's a guess of mine - the implied 'other' revenue in the Q3 report includes a chocolate factory of some sort (what the...), 1day (going backwards fast but very low margin - hopefully gets shut down), the markets, other group operations, and eliminations - so a whole lot going on and I am probably guilty of reading too much of one bit of data. If they are pulling back it would give me some comfort that nick isn't too gungho over it, if I'm wrong and they are still ramping it up in this environment would be disappointing as offsets all the goodwork they have achieved on margins in the core business over the last several years.

who knows it's all a big guess

as I say whether its $80 or $85 or 90 or 95, its still a lot more than the previous 5 years.
In the context of that brutal 107 day lockdown Aucklanders endured last year, record freight rates, RAT test costs, higher interest rates e.t.c. I think they're coping well. Pretty sure Grant will run a very generous lolly scramble for the WHS demographic this afternoon.
https://www.msn.com/en-nz/news/national/kiwis-are-really-hurting-hopes-budget-2022-will-deliver-as-businesses-and-workers-feel-cost-of-living-pinch/ar-AAXqKIw?ocid=msedgntp&cvid=94a2c2b8c6fe472eab9e9e918dc9b662

[Waltzing]

NZX not in panic mode yet..stock SP handles still holding up well...

no bargains yet...

[Waltzing]

" company simply doesn't do a very good job at given granular enough financial information/P&Ls for corporate overheads, the markets, and other operations"

what company does in a format that can be easily cut and pasted or imported via a PDF reader...

[LaserEyeKiwi]

New Zealand ends up with some Helicopter money of its own!

$350 coming to almost everyone earning under $70k.

Will be interesting to see what happens.

[Rawz]

Inflation out of control. Lets give people money to help with inflation. Righto..

[couta1]

New Zealand ends up with some Helicopter money of its own!

$350 coming to almost everyone earning under $70k.

Will be interesting to see what happens. KFC/Alcohol and Lotto tickets.

[Muse]

KFC/Alcohol and Lotto tickets.

How did you know what I did last night???

My lotto tickets werent winners but I did burp up some chicken skin this morning

[Muse]

Inflation out of control. Lets give people money to help with inflation. Righto..

I know right? We got inflation from too much stimulus here and abroad, so to combat it we stimulate more. One branch of government giveth, and the RBNZ taketh away with even higher & for longer interest rates.

Hope we didnt just earn us two more 50bps rate hikes, back to back

[Rawz]

Inflation out of control. Lets give people money to help with inflation. Righto..


I know right? We got inflation from too much stimulus here and abroad, so to combat it we stimulate more. One branch of government giveth, and the RBNZ taketh away with even higher & for longer interest rates.

Hope we didnt just earn us two more 50bps rate hikes, back to back

Whoops sorry I forgot. This is modern monetary theory. Money isnt real. It doesnt matter.
Just keep giving the people more and more to stay ahead of the wave.

Get more debt people. You dont even need to pay it back. the universe will do it for you

[Beagle]

LOL Lets all keep calm. We're talking about $350 each for 2 million people earning under $70K paid in three installments.
$700 for a modest earning family so that couple can have dinner out a few times and afford a baby sitter and buy some warm clothes for the kids.
Might actually help the hospo sector who badly need some stimulus !

[Rawz]

Plant your vege gardens. Go to the warehouse and buy 600 cans of Oak baked beans. Next year probably $60 a can :eek2:

[Beagle]

That's a lot of wind :lol:

[nztx]

August might be a good month for retail or maybe not -- possibly bill catch up time instead ? :)

Another 2 1/2 months of humungous inflation + increases in just about everything bar free fresh air until then :)

[nztx]

How did you know what I did last night???

My lotto tickets werent winners but I did burp up some chicken skin this morning

Neither were mine here - Oz Offers far better odds, prize variety & I find more wins :)

Don't tell the local lottery bods - the country cant afford to have them stopping pulling the wool :)

[nztx]

KFC/Alcohol and Lotto tickets.


you missed more Gas for the Boy racers & Window rammers :)

[Habits]

you missed more Gas for the Boy racers & Window rammers :)

Was there money for the worn out retailers trying to strengthen the walls against attack. Bollards deep in the ground does the trick, dont ask for council permission, shop will be smashed while still waiting bureaucratic wheels to turn.

Ps corner shops used to be the best but now they become a bigger target.

[ynot]

S&P500 down just over 4% - big hit. Retailer result summing up CNBC

https://www.cnbc.com/2022/05/18/what-walmart-target-home-depot-and-lowes-tell-us-about-the-economy.html


I see u like BBUS davexl. I'm hoping BBOZ will follow suit but probably wishful thinking on my part.

[LaserEyeKiwi]

Weekly Update:

13835

[Rawz]

HLG still to fall in line with a 10 or under P/E. $4.20. Musk would be all over it

[bull....]

another retail stock US hammered

Abercrombie & Fitch shares fall 30% after retailer posts loss, offers weak outlook
https://www.cnbc.com/2022/05/24/abercrombie-fitch-shares-fall-more-than-10percent-after-posting-an-unexpected-loss.html

[Waltzing]

NZ retail showing its strength today even after the news and the interview on CNBC by GOV RBNZ that they will stick it to inflation to 4 %

BRISC holding up and HLG refusing to give investors a Bargain..

Its MHJ that has taken the beating..

[LaserEyeKiwi]

I saw an interesting article yesterday talking about the massive buildup in US retailer inventories. Things appear to be turning for the supply chain and I wouldn’t be surprised to see a rapid slowdown in orders by US retailers that decreases pressure on the retail supply chain globally (and accompanying shipping costs), to the benefit of those retailers who have so far been unable to restock to adequate levels. Would also go a long way to easing inflation.

[Waltzing]

"Would also go a long way to easing inflation."

would be much hoped for !

[Waltzing]

On a brighter note for those who follow shopping statistical trends retail sales surged in Poland...

Plenty of you have poles in your families just like us.

https://notesfrompoland.com/2022/05/24/poland-posts-record-retail-sales-growth-in-april-amid-refugee-influx-and-inflation/

[Beagle]

In news overnight on Wall St Dollar General and Dollar Tree put in huge performances and consumers move down market and Gap is really struggling with the teen market (warning sign for HLG perhaps ?). Confusing the picture further Macy's did really well. Hard to know what to make of it all especially after Walmart and Target last week. Best read I can get on this is consumer demand is still good but some companies have managed supply chain, pricing and cost pressures a lot better than others.
https://www.nytimes.com/2022/05/26/business/macys-dollar-general-dollar-tree-earnings.html

[winner69]

And meanwhile in NZ consumer confidence takes another dive and Sharon says it's 'still dire'

ANZ Roy Morgan poll

https://watermarker.singletrack.io/ANZ_NZ_Roy_Morgan_Consumer_Confidence_closing_the_ wallets.pdf?data=DhZAW5pNirsgovBdALYwomrNyXdpUKxDB 7RxefLNZ79DdE3IwkjikhCo7OhrEBsP6Uagmgj6B6pPDNlZhuh 3q7PVWhJKgz1G4y3Pa2gtvjJmZXe1ybJXF8omQ%2F%2FM7zjwH yPlR%2B6bbE0q6n19105TIrVxvBKmLX9tiLzMPY9iyzQnk1MGW Rb73DKGiR5jvigmrBj1DCtAPxV2GO5tNTf3Kqqx3fB0LrRZ28z Bf8GUrw3h27qksJXO1%2FfN7ykbwOeIAkKHDUSGxHvwefBYAGu cKnJUDAyYW%2BLgr3PWGFFUL1bIOvSav%2Baw85Na8UylhXrDw ARnpSZ2GC2JWFX0qDT7pHtByPoFAEDvL8NHw0octW1v681CLGh guVXV7ZY%2B1CyDkcy%2B9%2FNR1D2gpRuxtuCmqIPtAOBVIXU WWmYsIp0hpUVsKAWD64d90kB3M787YbjO0P9HzrXofE78OUycf fGo330JuueA96mtLVn8V4AGhbiilnF9p7Bmjd3tkz4GzX6mUVD Mqu75zC0FvfDIJ8jEfqRIL%2BvC3LX2%2Fv2X6CRHsATrb%2BK 6iPM64OkVTk%2Fp8sPMqX%2FvJwCvK%2Bu2KI7vtPChQ2uQl0L c3Oc31JkCsWZM%2BQe2O7l7QBp4vJzQlMb5kYAO3te2Yomiif1 9CU8fPgzw%2BhakxbjoU1HADQADuHUuvw812Zxm5YsXU0RqSrI 2Gv5T6N1RGB65XOPOpayqBId0tPo7Yx%2FNwmI2KZT2UPxsU4m lGWprEXjN60RPhrrXLjk2%2BTRmLTb%2B7nOgvW3xNQWpzQJ9I Cv8bBguHQntou%2Br5UhAFIu1yREzbHl9anZLO%2BSKhTyZxVt BbOJnQCSE2YACtqbNqDS6SgKnI34EAsLHkPbEj44SR%2F9h69e hwC3RAhBv&s3Url=https%3A%2F%2Fanz-singletrack.s3.ap-southeast-2.amazonaws.com%2FANZ_NZ_Roy_Morgan_Consumer_Confi dence_closing_the_wallets.pdf%3FX-Amz-Signature%3D1519e1aec24e2a59122787067d8a4e2e21540b 4559033562bb1aaaca998ce87c%26X-Amz-Algorithm%3DAWS4-HMAC-SHA256%26X-Amz-Credential%3DAKIAZGZPZQBPX2SV22UN%252F20220526%252 Fap-southeast-2%252Fs3%252Faws4_request%26X-Amz-Date%3D20220526T000000Z%26X-Amz-Expires%3D86400%26X-Amz-SignedHeaders%3Dhost

[LaserEyeKiwi]

And meanwhile in NZ consumer confidence takes another dive and Sharon says it's 'still dire'

ANZ Roy Morgan poll

https://watermarker.singletrack.io/ANZ_NZ_Roy_Morgan_Consumer_Confidence_closing_the_ wallets.pdf?data=DhZAW5pNirsgovBdALYwomrNyXdpUKxDB 7RxefLNZ79DdE3IwkjikhCo7OhrEBsP6Uagmgj6B6pPDNlZhuh 3q7PVWhJKgz1G4y3Pa2gtvjJmZXe1ybJXF8omQ%2F%2FM7zjwH yPlR%2B6bbE0q6n19105TIrVxvBKmLX9tiLzMPY9iyzQnk1MGW Rb73DKGiR5jvigmrBj1DCtAPxV2GO5tNTf3Kqqx3fB0LrRZ28z Bf8GUrw3h27qksJXO1%2FfN7ykbwOeIAkKHDUSGxHvwefBYAGu cKnJUDAyYW%2BLgr3PWGFFUL1bIOvSav%2Baw85Na8UylhXrDw ARnpSZ2GC2JWFX0qDT7pHtByPoFAEDvL8NHw0octW1v681CLGh guVXV7ZY%2B1CyDkcy%2B9%2FNR1D2gpRuxtuCmqIPtAOBVIXU WWmYsIp0hpUVsKAWD64d90kB3M787YbjO0P9HzrXofE78OUycf fGo330JuueA96mtLVn8V4AGhbiilnF9p7Bmjd3tkz4GzX6mUVD Mqu75zC0FvfDIJ8jEfqRIL%2BvC3LX2%2Fv2X6CRHsATrb%2BK 6iPM64OkVTk%2Fp8sPMqX%2FvJwCvK%2Bu2KI7vtPChQ2uQl0L c3Oc31JkCsWZM%2BQe2O7l7QBp4vJzQlMb5kYAO3te2Yomiif1 9CU8fPgzw%2BhakxbjoU1HADQADuHUuvw812Zxm5YsXU0RqSrI 2Gv5T6N1RGB65XOPOpayqBId0tPo7Yx%2FNwmI2KZT2UPxsU4m lGWprEXjN60RPhrrXLjk2%2BTRmLTb%2B7nOgvW3xNQWpzQJ9I Cv8bBguHQntou%2Br5UhAFIu1yREzbHl9anZLO%2BSKhTyZxVt BbOJnQCSE2YACtqbNqDS6SgKnI34EAsLHkPbEj44SR%2F9h69e hwC3RAhBv&s3Url=https%3A%2F%2Fanz-singletrack.s3.ap-southeast-2.amazonaws.com%2FANZ_NZ_Roy_Morgan_Consumer_Confi dence_closing_the_wallets.pdf%3FX-Amz-Signature%3D1519e1aec24e2a59122787067d8a4e2e21540b 4559033562bb1aaaca998ce87c%26X-Amz-Algorithm%3DAWS4-HMAC-SHA256%26X-Amz-Credential%3DAKIAZGZPZQBPX2SV22UN%252F20220526%252 Fap-southeast-2%252Fs3%252Faws4_request%26X-Amz-Date%3D20220526T000000Z%26X-Amz-Expires%3D86400%26X-Amz-SignedHeaders%3Dhost

Its an interesting report - while the “good time to buy a major household item” & “expected house price growth”* is inching lower, all other metrics are improving off the Omicron induced lows of Feb/Mar.

(* how are an average of respondents still expecting house price growth? That amazes me.)

[winner69]

Its an interesting report - while the “good time to buy a major household item” & “expected house price growth”* is inching lower, all other metrics are improving off the Omicron induced lows of Feb/Mar.

(* how are an average of respondents still expecting hosue price growth? That amazes me.)

Punters are always hopeful eh

But then so are some investors in retail with that trait --- expecting good growth in retail because some signs are positive

[Habits]

(* how are an average of respondents still expecting hosue price growth? That amazes me.)

At the rate the numbers are changing there will be net negative next month and could stay negative a long time. I think people are slow to change their minds and that's the reason its positive still. For now am happy that it is net positive.

[Muse]

And meanwhile in NZ consumer confidence takes another dive and Sharon says it's 'still dire'

ANZ Roy Morgan poll

https://watermarker.singletrack.io/ANZ_NZ_Roy_Morgan_Consumer_Confidence_closing_the_ wallets.pdf?data=DhZAW5pNirsgovBdALYwomrNyXdpUKxDB 7RxefLNZ79DdE3IwkjikhCo7OhrEBsP6Uagmgj6B6pPDNlZhuh 3q7PVWhJKgz1G4y3Pa2gtvjJmZXe1ybJXF8omQ%2F%2FM7zjwH yPlR%2B6bbE0q6n19105TIrVxvBKmLX9tiLzMPY9iyzQnk1MGW Rb73DKGiR5jvigmrBj1DCtAPxV2GO5tNTf3Kqqx3fB0LrRZ28z Bf8GUrw3h27qksJXO1%2FfN7ykbwOeIAkKHDUSGxHvwefBYAGu cKnJUDAyYW%2BLgr3PWGFFUL1bIOvSav%2Baw85Na8UylhXrDw ARnpSZ2GC2JWFX0qDT7pHtByPoFAEDvL8NHw0octW1v681CLGh guVXV7ZY%2B1CyDkcy%2B9%2FNR1D2gpRuxtuCmqIPtAOBVIXU WWmYsIp0hpUVsKAWD64d90kB3M787YbjO0P9HzrXofE78OUycf fGo330JuueA96mtLVn8V4AGhbiilnF9p7Bmjd3tkz4GzX6mUVD Mqu75zC0FvfDIJ8jEfqRIL%2BvC3LX2%2Fv2X6CRHsATrb%2BK 6iPM64OkVTk%2Fp8sPMqX%2FvJwCvK%2Bu2KI7vtPChQ2uQl0L c3Oc31JkCsWZM%2BQe2O7l7QBp4vJzQlMb5kYAO3te2Yomiif1 9CU8fPgzw%2BhakxbjoU1HADQADuHUuvw812Zxm5YsXU0RqSrI 2Gv5T6N1RGB65XOPOpayqBId0tPo7Yx%2FNwmI2KZT2UPxsU4m lGWprEXjN60RPhrrXLjk2%2BTRmLTb%2B7nOgvW3xNQWpzQJ9I Cv8bBguHQntou%2Br5UhAFIu1yREzbHl9anZLO%2BSKhTyZxVt BbOJnQCSE2YACtqbNqDS6SgKnI34EAsLHkPbEj44SR%2F9h69e hwC3RAhBv&s3Url=https%3A%2F%2Fanz-singletrack.s3.ap-southeast-2.amazonaws.com%2FANZ_NZ_Roy_Morgan_Consumer_Confi dence_closing_the_wallets.pdf%3FX-Amz-Signature%3D1519e1aec24e2a59122787067d8a4e2e21540b 4559033562bb1aaaca998ce87c%26X-Amz-Algorithm%3DAWS4-HMAC-SHA256%26X-Amz-Credential%3DAKIAZGZPZQBPX2SV22UN%252F20220526%252 Fap-southeast-2%252Fs3%252Faws4_request%26X-Amz-Date%3D20220526T000000Z%26X-Amz-Expires%3D86400%26X-Amz-SignedHeaders%3Dhost


these roy morgan polls are interesting and historically have been good indicators of consumer & retail spend to come in the next few months but I think the relationship decoupled a bit in mid 2020. sharon z says ignore it at your peril and perhaps its directionally indicative of trends you cant get much of a read by how much spending will change. covid has just thrown up to many variables with extra savings and changing behaviour to place too much emphasis on these - ie if you got one of these reports in 2019 at these levels you probably would have seen spending fall by some big %. now terrible sentiment might only translate into a few % sales fall or flatlining sales. perhaps in a few years the relationship revert.

the point about inventory is a good one, though.

fixed cost control and maximising margin dollars (not necessarily % or worrying about revenue itself) is the name of the game

[winner69]

With all this gloom on NZ retail I wonder who will be the first to come out with a profit warning

[LaserEyeKiwi]

Weekly update:

TRA reported, OCR (& expected OCR peak) rose 0.5%, US markets had a big rebound - but much of it occurred on Friday (Saturday NZ time) so was not captured in NZ trading for this week.

Retail stocks significantly outperformed the NZ50 this week by almost 2%.

Overnight a key US inflation indicator was significantly lower than expected, leading to hope inflation may be past its peak.

Expect a positive opening here on Monday morning.

13850

[LaserEyeKiwi]

From Interest:


But first, the consumer inflation measure the US Fed watches most closely, the PCE (https://www.bea.gov/news/2022/personal-income-and-outlays-april-2022), dipped slightly in April, 'down' to 6.3% from March's +6.6%. Excluding food and fuel, it recorded its lowest level of the year, down to 4.9%. The same data showed that inflation-adjusted personal incomes were unchanged but consumption expenditures rose. That is the fourth straight rising month. The financial markets like that consumers are continuing their spending a good levels and Wall Street rose strongly to book a better-than-average weekly gain.

[LaserEyeKiwi]

Australian retail growth continues to chug along.

should be positive for HLG, MHJ & KMD (clothing & accessories were up which these three companies have direct exposure to in Australia)


Australia reported (https://www.abs.gov.au/statistics/industry/retail-and-wholesale-trade/retail-trade-australia/apr-2022) that retail sales were up +0.9% month-on-month in April, and up +9.6% year-on-year. These are gains financial markets were expecting and reflect a small slowing in retail demand. But this data is not inflation-adjusted, so that colours the results.

however it wasn’t good news for “household goods” which may be bad news for WHS & BRG if the trend is similar here in NZ.


Two industries experienced falls in turnover this month, with household goods retailing falling by 2.7 per cent and department stores by 2.5 per cent.

[Waltzing]

Yes looks exactly as you would not expect. Where is all the DOOM and GLOOM.

https://www.cnbc.com/2022/05/27/as-americans-splurge-on-dressing-up-again-retailers-like-macys-and-ulta-benefit.html

"“One of the major fashion trends in women’s right now is head-to-toe color suits,” Express CEO Tim Baxter said in a phone interview. “We haven’t been in that kind of a fashion cycle in a long time.”"

[beetills]

DOLLAR GENERAL in the US going well.

[Waltzing]

Investing gender diversity is it appears very very important.

WHO new that ULTA would out perform!!!

[Rawz]

https://mortgages.co.nz/downloads/TonysView26May2022.pdf

Tony Alexanders view on retail. Lot's of interesting graphs. Spending is over the long term trend line and need to fall back in line..

[Muse]

https://mortgages.co.nz/downloads/TonysView26May2022.pdf

Tony Alexanders view on retail. Lot's of interesting graphs. Spending is over the long term trend line and need to fall back in line..

Interesting article thanks rawz

[winner69]

https://mortgages.co.nz/downloads/TonysView26May2022.pdf

Tony Alexanders view on retail. Lot's of interesting graphs. Spending is over the long term trend line and need to fall back in line..

Good to see a economist taking my approach by looking at annual numbers and trends rather than monthly / quarter % plus / minuses. Some of those charts look like the ones I’ve posted for WHS and BRG

The negative signals started back in last July ….but not many agreed with me back then

But then again both Tony and myself might be completely wrong and retail will be be fine over the next year or so …no need to have a ‘negative bias’ as Tony called it.

[Muse]

Good to see a economist taking my approach by looking at annual numbers and trends rather than monthly / quarter % plus / minuses. Some of those charts look like the ones I’ve posted for WHS and BRG

The negative signals started back in last July ….but not many agreed with me back then

But then again both Tony and myself might be completely wrong and retail will be be fine over the next year or so …no need to have a ‘negative bias’ as Tony called it.

The question in my mind is how much and for how long are households willing to eat into their savings to maintain spending? Not sure anyone has the answer for that

[Beagle]

The question in my mind is how much and for how long are households willing to eat into their savings to maintain spending? Not sure anyone has the answer for that

Jury is out but what we know so far for sure is they are trading down from brand names to house brands.

[Waltzing]

Could it also be that as GDP has increased over the last decade there was always going to be an increase in retail spending.

[troyvdh]

Thanks Moose.Not only willing but able to....sad to say lessons from the past have yet to be learned.
People could refer to Bernhard Hickeys post a while back about nz property.
Im pleased that Ashley Church is less often heard these days....

[winner69]

Mike Hosking says he never seen the steak house and the mall so full of people spending money like it’s going out of fashion
. Late afternoon …didn’t catch which mall.

Mike says the confidence polls and reality don’t marry.

Like business confidence polls probably consumers gaming the system …..sucking govt into being generous. (My opinion)

So no worries …NZ retail sales will be strong over winter

Punters might even start trading up again.

[Waltzing]

"sucking govt into being generous"

you should be on his show Winner(n*)

Brilliant ...

with morning TV1 now just a Tik Tok dance routine Mike Hosting could run his own morning TV show..

[winner69]

Better get Mike to go to Sydney to check if this is for real

‘Party’s over’: Retailers brace for grim times as spending dries up

https://www.smh.com.au/business/companies/party-s-over-retailers-brace-for-grim-times-as-spending-dries-up-20220529-p5apcd.htmlhttps://www.smh.com.au/business/companies/party-s-over-retailers-brace-for-grim-times-as-spending-dries-up-20220529-p5apcd.html

[Waltzing]

lucky everyone cut their retail exposure.....right.. except for sta apples and retailers with fortress balance sheets..:scared:

[kiwico]

Mike Hosking says he never seen the steak house and the mall so full of people spending money like it’s going out of fashion
. Late afternoon …didn’t catch which mall.

Mike says the confidence polls and reality don’t marry.

Like business confidence polls probably consumers gaming the system …..sucking govt into being generous. (My opinion)

So no worries …NZ retail sales will be strong over winter

Punters might even start trading up again.

He also spoke about being unable to find a park at Sylvia Park following a suggestion life was hard for those in South Auckland, even if not elsewhere. From his description it sounded like all parts of Auckland retail are humming.

[kiwico]

At the top of the most read list of world news on the BBC website is that NZ is too expensive, 'Global cost of living - "We left New Zealand - it's costly"' so some are certainly seeing the prices as prohibitively high.

13855

[Waltzing]

Hey Winner(*) you spread doom and gloom today from AUS and MHJ goes UP!!!

[Rawz]

Because MHJ has nearly $100m cash in the bank and is therefore trading on something like a 6.7 forward p/e

[Waltzing]

Rawz your a spark of light in amongst the gloom...:t_up:

[Rawz]

Rawz your a spark of light in amongst the gloom...:t_up:

Ive been playing around with a DCF model and seeing what it says when sales drop 15% and profits drop to $34m from $45m then grows at 3% for 10 years... then a few more scenarios... $1 aus per share is certainly the floor. Anything under is a great buy. and that is excluding the cash in bank... so really buying now is great.

so basically i am very comfortable holding MHJ right now and will enjoy the divvies and rest easy knowing there is a great CEO/CFO and Chairman that will navigate the business through this period of inflation and rising rates

[Waltzing]

Certainly interesting to see the next updates.

if they can hold the line it will be a huge win. Event a few steps backward wont matter.

[winner69]

Pretty good day for retail stocks on NZX today

WHS, HLG and KMD solid gains while MHJ took a tumble (not surprising)

[Waltzing]

Some large orders when through today at the end of trade.

MHJ ? yes well not a stable staple...

[LaserEyeKiwi]

Looked like some big portfolio rebalancing on the close for end-of-month big spike right across the NZ market (alas not MHJ though).

[LaserEyeKiwi]

Weekly Update:

Solid performance for our retail stock basket this week, driven by big gains in HLG in particular. Oil prices surged higher to $120 US a barrel. NZ dollar ~0.65c vs USD. International shipping rates remain flattish.

13871

13872

[Waltzing]

First day back from software development.

Nice LEK is that GREEN!!! all of them GREEN?

cant be right... must be its just numbers after all.

But we havnt seen any trading updates and the MHJ thats usually about july?

BGP next update is August that will be MAY,JUNE, JULY. Winners(n)'s AUS monthly retail stats will be closely watched.

[Muse]

Target announces another profit downgrade overnight due to excess inventory issues
https://www.wsj.com/articles/target-inventory-warning-portends-retail-bloodbath-11654619282

paywalled but the video on targets business model isn't behind the paywall (which is unique) is worth a watch

you can also listen to the article, which for some reason isn't behind the paywall

[Waltzing]

Yes FM results could be impacted for some retailers on over stocking carry more than they needed..

some really big sales coming? or those sales were in April.

[Muse]

Yes FM results could be impacted for some retailers on over stocking carry more than they needed..

some really big sales coming? or those sales were in April.

I'd hazard a guess that a good portion of sales/discounting relate to summer & winter seasonal products, so a lot of local retailers won't have a firm handle on what they need to discount until midway or near the end of the winter sales season. They usually do a provision for that at HF and YE, but then the actual discounting occurs a quarter or two after season end to clear the stock

But for the non seasonal stuff, I guess that just depends on how much stock retailers already had, the amount product on the water, and offtake from existing inventories. Pretty retailer specific I'd imagine with whats selling whats not and different procurement strategies

[winner69]

Some might say that the government is to blame for the low levels of consumer confidence.

Change the government and retail will boom again?

[winner69]

Truckometer looking positive …consumers probably spending

https://watermarker.singletrack.io/ANZ_NZ_Truckometer_drive_on.pdf?data=DhZAW5pNirsgo vBdALYwomrNyXdpUKxDB7RxefLNZ79DdE3IwkjikhCo7OhrEBs P6Uagmgj6B6pPDNlZhuh3q7PVWhJKgz1G4y3Pa2gtvjJmZXe1y bJXF8omQ%2F%2FM7zjwHyPlR%2B6bbE0q6n19105TIn7y569Ew tcbSUaGuZdxeJVq3SCDX3LNTPlPWdtVPBpv5i42B%2FnZwWCL4 TdYlDmHxSEomQPPrCXS5O8Dcqybm1q7hrKcrRgVLQwMWs0AAHb T4eskO%2BgwvC5fu9WSg4qTxlxkh793V6I7%2FvFcNXda21bDU ZAif2rJEEaCzA9ag1HRTzoYPUDTC2173a34xAg0NJLH%2BYb3V 96BV8AnsWnLMkVSnAhvWY2xzxjEbxd7xPcN6xk8uQGYCYZ5oAy X2mgsbDY3cWi%2FsG82%2FvLQON%2BXx2%2FqTeshKkERqeF%2 FU2vKzZFnirQBsWhfQgiPbBlrU8P5gXlTvlH%2Fw3vdBQHoX9r DvhuAjLoUG2Y83qK7zpWTJPq4sFQ4cWIXwX5uc2nfM%2FMfq3a OeqeHoFI1a80%2FomfFKFIpVw2QLiKyGaGy9rFuVkAFUHfyWY4 48wO3Ea0xOx5BaAZpLazl2NIWkeR1Uu8Dlu7bDOlPkTFd2XguZ u0yH5H4cThaiI%2FSV8GB6QBRHrsqdJtevdDdOE7hoGw4MF4rT nuwFtYB9V1Okg%2F%2Bh2XymWzlrbPrV01qGpUayv5o5ZUdP38 pPOE%2Fe50Td1GkrWcUJTcCxGAheg6%2BvwN442sFa1gTGohwC mLVeVBMhyCETlb9cPUE2yi%2BY%2FJ1i%2FrJuEbc2FM%3D&s3Url=https%3A%2F%2Fanz-singletrack.s3.ap-southeast-2.amazonaws.com%2FANZ_NZ_Truckometer_drive_on.pdf% 3FX-Amz-Signature%3D115a28e4babd8ff4ce744e19eb968e410aae75 637a38f32c6db364cee5a236f1%26X-Amz-Algorithm%3DAWS4-HMAC-SHA256%26X-Amz-Credential%3DAKIAZGZPZQBPX2SV22UN%252F20220608%252 Fap-southeast-2%252Fs3%252Faws4_request%26X-Amz-Date%3D20220608T000000Z%26X-Amz-Expires%3D86400%26X-Amz-SignedHeaders%3Dhost

[Muse]

Datamine's Retailwatch figures for May just came out.

May and last rolling 3 month changes segmented below. Underlying trend appears to have worsened in May

[winner69]

Datamine's Retailwatch figures for May just came out.

May and last rolling 3 month changes segmented below. Underlying trend appears to have worsened in May

Take Fuel and travel out of the total numbers and retail all rather sick looking

The trend started to appear back last July so no eurprises

[winner69]

Stats NZ Electronic Card Spend for MAy Month

Card spending increases in May

So all good in seasonally adjusted terms but actually Core Retail was less than May last year

https://www.stats.govt.nz/news/card-spending-increases-in-may/

[Muse]

Take Fuel and travel out of the total numbers and retail all rather sick looking

The trend started to appear back last July so no eurprises

the funny thing about a high inflation environment is that if your sales are running at ~7% you aren't actually selling any more product. The worry is that if you can't keep sales in line with inflation your indirect costs still are rising at inflation, and operating leverage crunches your ebit margins. Even if you get sales of 2-3%, your volumes are going backward, and going backwards even faster at 0 or -5% total sales. Rebates tend to get tied to volumes so losing those starts to eat into your future profits, and if volumes go backwards too fast you could get stuck with higher inventories which you have to discount later.

interesting times - hopefully this inflation issue gets sorted out sooner rather than later.

[LaserEyeKiwi]

Take Fuel and travel out of the total numbers and retail all rather sick looking

The trend started to appear back last July so no eurprises

One could almost argue this a return to pre-pandemic consumer spending - with increases in dining and recreation, and huge increase in travel and accommodation (up 77% y-o-y). Combined with the fuel price hike & food price surges it’s definitely a perfect storm for bad year on year comparisons for discretionary retail.

[winner69]

the funny thing about a high inflation environment is that if your sales are running at ~7% you aren't actually selling any more product. The worry is that if you can't sales in line with inflation your indirect costs still are, and operating leverage crunches your ebit margins. Even if you get sales of 2-3%, your volumes are going backward, and going backwards even faster at 0 or -5% total sales. Rebates tend to get tied to volumes so losing those starts to eat into your future profits, and if volumes go backwards too fast you could get stock with higher inventories which you have to discount later.

interesting times - hopefully this inflation issue gets sorted out sooner rather than later.

Stats NZ said this ... number of transactions probably indicative of 'volume' v value

The total actual spending using electronic cards was $8.4 billion, up 3.1 percent compared with May 2021. On the other hand, the number of transactions in May 2022 decreased 7.4 percent from May 2021.

[Waltzing]

7.4 is a lot.

more big sell off to come this year as the FED moves to consider a .75? next week?

hope not.

3 percentage down S&P.

Could space be the next frontier of investing for retail investor.

Russia-Ukraine war: How Elon Musk's StarLink thwarted Vladimir Putin's information war - NZ Herald (https://www.nzherald.co.nz/world/russia-ukraine-war-how-elon-musks-starlink-thwarted-vladimir-putins-information-war/VZNP7DA2S7CO75MJM7EOCYFK7A/)

[LaserEyeKiwi]

Weekly Update:

Retail stocks slightly outperformed the NZX50 this week (down 2% vs down 2.5% for NZX50)

(note: KPG went ex a 3c divi this week)

13886

OIL Surges to over $122 USD per barrel (!) - the pain keeps increasing on consumers.

US CPI came in slightly worse than expected overnight (our Saturday) - up 8.6% year on year / 1.0% month on month.

StatsNZ May card spending data and retailwatch reported with mixed reading, but overall retail spending looks to be retreating y-o-y with that money going towards fuel, holidays & dining/entertainment.

The Shipping cost index continues to glide lower:

13887

However with NZD declining vs USD (currently 63.7c), these lower shipping costs are not probably flowing through currently to NZ retailers.

[Rawz]

TRA looking very cheap for a well managed growing business!!

[Waltzing]

Winner(*n) US retail got a bit of a knock. Biggest -() was Car Sales.

"Retail sales in the US unexpectedly fell 0.3% mom in May of 2022, the first decline so far this year and compared to market forecasts of a 0.2% rise. It follows a downwardy revised 0.7% increase in April, as high inflation, gasoline prices and borrowing costs hurt spending on non-essential goods. Auto sales recorded the biggest decline (-4%) and sales also fell at electronics & appliance stores (-1.3%); miscellaneous store retailers (-1.1%); nonstore retailers (-1%); furniture stores (-0.9%); and health & personal care stores (-0.2%). On the other hand, retail sales rose at gasoline stations (4%), amid a surge in gas prices; food and beverage stores (1.2%); food services and drinking places (0.7%); sporting goods, hobby, musical instrument & book stores (0.4%); and general merchandise stores (0.1%). Excluding autos, retail sales were up 0.5% and excluding gas and autos 0.1%.

[Waltzing]

Another good day for NZ retail well done those stocks.

cant last?

[LaserEyeKiwi]

Weekly update:

Red week (except for a green WHS, nice). Performance for our basket of retail stocks fairly close to NZX50 (5.1% vs 4.9%).

Note: KMD went ex-div.

Fed raised 0.75% - consumer sentiment indexes continue lower, trailing retail sales showing relatively flat y-o-y globally.

Energy & commodity prices actually pulled back noticeably over last week, oil down ~$10 a barrel, natural gas (USA) also down sharply from ~$9.00 to ~$7.00.

Shipping costs continues its slow but steady decline: down another 1% this week.

13908

[Beagle]

WHS - best performing retail stock year to date, actually better than what's shown due to the recent dividend.
No doubt NZX50 inclusion and MSCI small companies inclusion has helped but also consumer staples are simply more resilient so I expect them to continue to outperform in this recession. That said, the way the tide is going out presents challenges to all companies so I am a little more cautious than I was on that one.

HLG, gosh what a pop and drop that's been in the last few weeks. Thought for a minute there I'd missed the boat there but the outgoing economic tide is so strong I think this may have a 4 something handle on it soon. Still a long time to go to the next dividend so I'm in no hurry and my sense is this winter is going to long and cold in more ways than one !

What a week on the NZX - down 5% on top of the ~ 15% its already dropped year to date ! Breathtaking stuff !

[Habits]

WHS - best performing retail stock year to date, actually better than what's shown due to the recent dividend.
No doubt NZX50 inclusion and MSCI small companies inclusion has helped but also consumer staples are simply more resilient so I expect them to continue to outperform in this recession. That said, the way the tide is going out presents challenges to all companies so I am a little more cautious than I was on that one.

HLG, gosh what a pop and drop that's been in the last few weeks. Thought for a minute there I'd missed the boat there but the outgoing economic tide is so strong I think this may have a 4 something handle on it soon. Still a long time to go to the next dividend so I'm in no hurry and my sense is this winter is going to long and cold in more ways than one !

What a week on the NZX - down 5% on top of the ~ 15% its already dropped year to date ! Breathtaking stuff !

Will stocks retest their most recent lows
Whs 3.19 Hlg 5.03 Tra 3.60 and Kmd 1.02

There was a good bounceback for those that bought in ...but the trend is down

[winner69]

Mike Hosking reckons reality in the world of retail (what is actually happening) is out of step with the data

June Consumer Confidence from Westpac …. Confidence among New Zealand households has plummeted, dropping to its lowest levels since we began surveying consumers back in 1988.

And how’s this

Misery loves company.
Normally each quarter we dive into how confidence differs across various household groups and regions in the economy. However, a particularly notable feature of this quarter’s survey is how uniform the drop in confidence has been. Confidence has fallen sharply across all age groups and income brackets.
Confidence also is at low levels in every corner of the country.

I think Mike Hosking is right …..if you agree don’t bother read this bit of gloom

https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/New_Zealand/2022/June_2022/Q2_Consumer_conf_Jun_2022_Westpac_NZ.pdf

[winner69]

This is usually best indicator if punters are going to do a bit of spending

[ithaka]

Morgan Stanley's bearish strategist Michael Wilson, who in his latest bearish weekly note focused on shrinking margins in general, and on retailer discounting in particular, and wrote that while there is a modest pick up in over sales, the far more concerning issue is that "inventory across the sector is up about 30% YOY and sales growth is up about 0% YOY translating to approximately 30% YOY of excess inventory" and while mark down/margin pressure did not hit in 1Q it should hit June/July.

https://www.zerohedge.com/economics/deflationary-tsunami-deck-tidal-wave-discounts-and-crashing-prices

[Waltzing]

honestly winner(n) that chart looks about as useful as watching TIK TOK TV one morning news and who does that anymore unless you want some dance steps for your next TIK TOK creation...

its just that 5-6 dollar coffees sales will drop? but interest free offers for (n) months will be here for a while.

if those double shot coffee's keep being brewed and top gun keeps shooting up at the box office the crowd will go wild over the sports channels this winter.

People dont stay depressed for ever..

imagine MHJ back at .80? great value ...

[LaserEyeKiwi]

This is usually best indicator if punters are going to do a bit of spending

Wow. That is amazing. Basically full employment with rising wages and the collective NZ psyche is “we’re F@&KED!” - such a massive disconnect between perception and reality.

[Rawz]

Wow. That is amazing. Basically full employment with rising wages and the collective NZ psyche is “we’re F@&KED!” - such a massive disconnect between perception and reality.

thats the media's fault.

A lot of my customers are being cautious for this reason but all reporting heavy pipelines of work ahead. It's strange

[Waltzing]

Classic LEK!!!!!!

yeah the Minister of Finance says "better times are coming" and the punters are saying "depression is here"...

wait till next march and they see that the sun is rising over BOP beaches and everyone is flowing down south island's finest whites ....

country will go wild... its just they arnt used to a nuclear winter yet.... once they get the new old mind set back and watch a few sports events they will cheers up...

the media are all under 45 and dont remember the cold war and how much fun it was...

think abbey road!!! and Abba ...

https://www.youtube.com/watch?v=ETxmCCsMoD0

[LaserEyeKiwi]

According to that report, consumer confidence when pessimistic always overshoots to the downside vs actual GDP result (ignoring the covid lockdown).

13913

[winner69]

Wow. That is amazing. Basically full employment with rising wages and the collective NZ psyche is “we’re F@&KED!” - such a massive disconnect between perception and reality.

That's what Mike Hosking says ..... I now believe what a guru economist recently said when the anecdotes and the data disagree, the anecdotes are usually right’


Like that

[LaserEyeKiwi]

That's what Mike Hosking says ..... I now believe what a guru economist recently said when the anecdotes and the data disagree, the anecdotes are usually right’


Like that

its also true in this case that perception can lead to a different reality. If everyone thinks we are heading for cataclysm and causes a big pullback in retail spending, then a big chunk of the economy takes a hit. Ditto what is going on in the housing market at present - Everyone thinks housing prices are heading south, which reinforces the drop as no one is buying - although in that case I think it is a good thing overall for NZ that house prices plummet back to some semblance of sustainable.

[Waltzing]

Lets hope the AUSSIE's are a totally depressed and HLG, MHJ all suffer huge losses in sales vol.... wait do their customers even listen to radios any more?

which station do they listen to ?

its all streaming isnt it?

https://www.noelleeming.co.nz/c/audio/portable-audio/cd-players-radio?gclsrc=aw.ds&&gclid=EAIaIQobChMIyYnG9pC9-AIVlyQrCh1JXgd6EAAYASAAEgItOvD_BwE&gclsrc=aw.ds

suppose when the market gets the news it will go from blue this morning to red in the AVO..

[bull....]

Kiwi households face a $15 billion spending crunch over about the next 18 months, according to estimates by ASB economists
"We’re left with support for our view that consumer spending growth will slow to a crawl later this year," Jones says.

https://www.interest.co.nz/personal-finance/116512/asb-economists-predict-consumer-spending-growth-will-weaken-anaemic-levels

So the impact will come thru in feb/march 23 reporting ?

[Beagle]

N.Z. recession almost certain - Independent economist https://www.nzherald.co.nz/business/nz-recession-almost-certain-says-independent-economist/XLQAAGVM4WEJP7RZCKOWHU5QEA/

[winner69]

Let us not forget that Core Retail sales (basically everything but vehicle related) have never gone backwards on an annual basis .... at least this century

Currently sales are 12% higher than pre-covid so not too bad

But probably will be 'more subdued' times over next year or so ..... and 'more subdued' is generally not a good time for retailers

[Rawz]

Is that why MHJ is trading on a 8.99 p/e with $100m in the bank?

[Muse]

Let us not forget that Core Retail sales (basically everything but vehicle related) have never gone backwards on an annual basis .... at least this century

Currently sales are 12% higher than pre-covid so not too bad

But probably will be 'more subdued' times over next year or so ..... and 'more subdued' is generally not a good time for retailers

Interesting factoid but from an investing perspective what does this mean?

Because listed retailer revenue, earnings and dividends certainly can and do go backwards from time to time

[winner69]

Interesting factoid but from an investing perspective what does this mean?

Because listed retailer revenue, earnings and dividends certainly can and do go backwards from time to time

That's why I mentioned a 'more subdued' retail environment is often not a good time for retailers ..... some might struggle to 'grow' the top line which is not good if margins come under pressure and expenses continue to go up

Wonder how many updates mention 'subdued' or 'challenging' market conditions over the next year or so

[winner69]

Is that why MHJ is trading on a 8.99 p/e with $100m in the bank?

PEs are always low at the top of the cycle

but then again 9 is quite a respectable PE for a retailer

[Rawz]

PEs are always low at the top of the cycle

but then again 9 is quite a respectable PE for a retailer

Looking forward to buying some HLG at 9 p/e, That's $3.83 a share

[Beagle]

Looking forward to buying some HLG at 9 p/e, That's $3.83 a share

There might be a "few" people ahead of you in the queue @ $4 ;)

[LaserEyeKiwi]

So…are we staying “here”….or going “there”….?

[Rawz]

So…are we staying “here”….or going “there”….?

Stay here mate… until this crashes again?

[Waltzing]

Aussi retail a bouncing kanga ... just ahh out standing ... could have been much much worse. Still the R word mention in the next 18 months? Gosh that would take investors back into TD's but are the SHAZ now the new gamblers at the track side. Addicted to the new retail share platforms and there is no going back.


https://www.cnbc.com/2022/06/29/australias-retail-sales-beat-forecasts-again-in-may.html

[Waltzing]

And just to put a further hand break on the markets ...

https://www.cnbc.com/2022/06/29/feds-mester-backs-75-basis-point-hike-in-july-if-conditions-remain-the-same.html

[Habits]

And just to put a further hand break on the markets ...

https://www.cnbc.com/2022/06/29/feds-mester-backs-75-basis-point-hike-in-july-if-conditions-remain-the-same.html

Price for 75 and then if 50 the share and bond markets will rebound

[Waltzing]

Yes the market will like it but its SP's in 12 months that are the big question and the no increase in DIV?

[LaserEyeKiwi]

Good news out of OZ:


In Australia, retail sales rose (https://www.abs.gov.au/statistics/industry/retail-and-wholesale-trade/retail-trade-australia/may-2022) by +0.9% month-on-month in May to AU$34.2 bln, topping market forecasts and matching the April gain. This was also their fifth straight month of growth, as the Aussie economy recovered further from pandemic disruptions. The rise from a year ago exceeded +10%, handily beating inflation. Department stores had the largest month-on-month rise, up +5.1%, followed by cafes and restaurants. Given Australian consumer sentiment is low, this free-spending is a puzzle - not too dissimilar to the same track in the US. Makes you suspect "sentiment" is now hijacked as political, whereas the spending track tells the real economic story.

[winner69]

And just to put a further hand break on the markets ...

https://www.cnbc.com/2022/06/29/feds-mester-backs-75-basis-point-hike-in-july-if-conditions-remain-the-same.html

Retail in Aussie really booming ---- 6% ahead on last year

The chart below is total sales less food (sort of proxy for discretionary spend) over the last few years

Seems to be at odds with a lot of the commentary about the state of retail over the ditch

[bull....]

wonder when whats happening in the US feeds thru to aus/nz

High-end furniture chain RH on Wednesday slashed its outlook for 2022 revenue, anticipating consumer demand for its products will continue to soften in the back half of the year.

“With mortgage rates double last year’s levels, luxury home sales down 18% in the first quarter, and the Federal Reserve’s forecast for another 175 basis point increase to the Fed Funds Rate by year end, our expectation is that demand will continue to slow throughout the year,” CEO Gary Friedman said in a statement.

https://www.cnbc.com/2022/06/29/rh-shares-slide-after-company-lowers-its-outlook-for-the-year.html

they just downgraded a while back as well

[Waltzing]

The Kanga's addicted to retail spending after 2 years of stay and play at home.

Winner(n) 6 percent up but what portion is inflation.

Its the Margins that will be hit? and therefore DIV a constant if investors are lucky.

P/E are still above average long run AVE?

[winner69]

The Kanga's addicted to retail spending after 2 years of stay and play at home.

Winner(n) 6 percent up but what portion is inflation.

Its the Margins that will be hit? and therefore DIV a constant if investors are lucky.

P/E are still above average long run AVE?

Margin hit --- waltz me old mate you've got to stop reading all that stuff in the media (esp CNBC ;)).... worse still you're being swayed into believing it

[bull....]

Retail in Aussie really booming ---- 6% ahead on last year

The chart below is total sales less food (sort of proxy for discretionary spend) over the last few years

Seems to be at odds with a lot of the commentary about the state of retail over the ditch

yep retail is booming but not retail stocks

heres a combined chart or index of the major aussies retail stocks . you can see they are not reflecting the boom in sales. guess stocks are forward looking

13929

[Waltzing]

winner(n)

COGS

its the only thing to believe.

Now smart charts with events when transactions are processed automatically do the stats for P&L accounts.
Companies with these types of transaction processing systems will know the margins instantly in real time.

Companies without these systems will not.

Lets wait and see what the internals on the P&L spit out...

Inflation up? Margins down....

[Waltzing]

Winner(n) lets not forget the local papers that are state funded ..

ANZ says business confidence slumps ... :scared:

Herald not CNBC or bloo000mbergs...

Business confidence slumps again, profit outlook 'dire', says ANZ - NZ Herald (https://www.nzherald.co.nz/business/business-confidence-slumps-again-profit-outlook-dire-says-anz/VNSMYUI4H2TLMGAOZJOECMQUAQ/)

[nztx]

Winner(n) lets not forget the local papers that are state funded ..

ANZ says business confidence slumps ... :scared:

Herald not CNBC or bloo000mbergs...

Business confidence slumps again, profit outlook 'dire', says ANZ - NZ Herald (https://www.nzherald.co.nz/business/business-confidence-slumps-again-profit-outlook-dire-says-anz/VNSMYUI4H2TLMGAOZJOECMQUAQ/)


heard it all before in the mighty 2020 Covid dip then what happened ? :)

Might be still a few happy rounds to be had with NZME on whose hard partying at a price will land in the bin :)

[Waltzing]

well NZTX talking to a specialist sport product distributor who said there quiet time of year was usually june july but this year they are over run. Thinks its that people have had enough of locks downs and stay at home and are making up for lost time.

Other factors are always at play and for some it might be an uneven market hitting some and not other markets.

[Waltzing]

winner(n)

BEA and GDP Tracker.

https://www.atlantafed.org/cqer/research/gdpnow

https://www.bea.gov/

better than CNBC but their graphic engine looks good.

[LaserEyeKiwi]

Weekly Update:

13938

[LaserEyeKiwi]

Decent drop in shipping costs last week:

Plus we have lapped the big increases from last year so now have year on year improvement in shipping rates.

13939

[winner69]

From US …things looking OK?

[Waltzing]

sure, fine, dandy .....

well sun out again today... super ...

[LaserEyeKiwi]

Oil dropped below $100 a barrel today - both WTI & Int Brent.

[Azz]

Shipping rates down, oil dropping, etc will have no change to general and overall pricing of goods and services in NZ. Our inflation is monetary inflation. It's not price inflation. Do you really think the $20 burger combo, one example, is returning to what it used to cost?

[SailorRob]

Shipping rates down, oil dropping, etc will have no change to general and overall pricing of goods and services in NZ. Our inflation is monetary inflation. It's not price inflation. Do you really think the $20 burger combo, one example, is returning to what it used to cost?

Utter nonsense.

[Azz]

Utter nonsense.

So prices will go back to what they were, will they? Just a supply/demand glitch?! Every bill that's gone up, those providers will drop their prices, will they? The big pay rises occurring, those salaries will drop?

[SailorRob]

So prices will go back to what they were, will they? Just a supply/demand glitch?! Every bill that's gone up, those providers will drop their prices, will they? The big pay rises occurring, those salaries will drop?


No Ass, prices will DECREASE in real terms as they have for 5000 years.

It's called productivity and rising standard of living over time.

Just about everything will become cheaper per hour worked over time as it always has.

In 50 years time people could not conceive of living how we live now. For their annual salary they will be able to purchase far more in terms of goods and services than we can now.

[Azz]

No Ass, prices will DECREASE in real terms as they have for 5000 years.

It's called productivity and rising standard of living over time.

Just about everything will become cheaper per hour worked over time as it always has.

In 50 years time people could not conceive of living how we live now. For their annual salary they will be able to purchase far more in terms of goods and services than we can now.

Amazing! Inflation doesn't exist! You better tell the Reserve Bank! Drop a line to the Federal Reserve while you're at it. Thank the Lord, I was worried for a moment there.

[SailorRob]

Correct, in real terms (and often nominal too see below). We live in a deflationary world and always have.

Inflation may exist in numbers but not in real purchasing power, or economically speaking.

Even in 'numbers' terms, I encourage you to watch a episode of 'sale of the century' or other such game shows of the late 80's early 90's where they advertised the prices of the goods they gave away - usually overseas holidays, bikes, stereo systems, cars. 30 years later EVERYTHING is far far cheaper even in dollar terms, let alone per weeks pay.

You will find the same if you go to your local library and look through the Herald from 1995, check out the prices of everything, in many cases far higher than now.

Deflation.

I would say the 1000 PhD's at the Fed, like yourself, would really struggle with this.

[Azz]

Correct, in real terms (and often nominal too see below). We live in a deflationary world and always have.

Inflation may exist in numbers but not in real purchasing power, or economically speaking.

Even in 'numbers' terms, I encourage you to watch a episode of 'sale of the century' or other such game shows of the late 80's early 90's where they advertised the prices of the goods they gave away - usually overseas holidays, bikes, stereo systems, cars. 30 years later EVERYTHING is far far cheaper even in dollar terms, let alone per weeks pay.

You will find the same if you go to your local library and look through the Herald from 1995, check out the prices of everything, in many cases far higher than now.

Deflation.

I would say the 1000 PhD's at the Fed, like yourself, would really struggle with this.

Working people's savings being wiped out by inflation - we'll just tell them that in REAL TERMS they're better off!

[SailorRob]

Working people's savings being wiped out by inflation - we'll just tell them that in REAL TERMS they're better off!


Different argument, however if people insist on saving in a debt instrument then this is what happens. They have a fixed coupon, they will get wiped out.

As long as you save by investing in the means of production you will always be fine. If people lend their savings to Big Grant, or a bank then you will not be fine.

As you have taught us, Bitcoin solves this and those who don't own it will have fun staying poor.

[Azz]

Different argument, however if people insist on saving in a debt instrument then this is what happens. They have a fixed coupon, they will get wiped out.

As long as you save by investing in the means of production you will always be fine. If people lend their savings to Big Grant, or a bank then you will not be fine.

As you have taught us, Bitcoin solves this and those who don't own it will have fun staying poor.

No it's not a different argument at all. You live in a fantasy world where inflation is some sort of "construct" and you're apparently utilizing a 5,000-year timespan. These little fetishes of yours do not resonate with working people - or the middle classes either for that matter - as their wages become worth less and less and their savings are destroyed. Inflation, the destruction of money, hits the poor the hardest. The big pay rises we're seeing in NZ are within the upper ranges. And you don't care about any of this at all. You talk a bunch of nonsense.

[SailorRob]

No it's not a different argument at all. You live in a fantasy world where inflation is some sort of "construct" and you're apparently utilizing a 5,000-year timespan. These little fetishes of yours do not resonate with working people - or the middle classes either for that matter - as their wages become worth less and less and their savings are destroyed. Inflation, the destruction of money, hits the poor the hardest. The big pay rises we're seeing in NZ are within the upper ranges. And you don't care about any of this at all. You talk a bunch of nonsense.

As I've explained, peoples wages become worth more and more over time. Always have always will.

For a single weeks minimum wage in 20 years from now, I could purchase goods and services unimaginable to me now.

[clearasmud]

As I've explained, peoples wages become worth more and more over time. Always have always will.

For a single weeks minimum wage in 20 years from now, I could purchase goods and services unimaginable to me now.

Sailor rob is right.
How long have you been alive?

[bull....]

the only things cheaper are things made with slave labour

[Azz]

As I've explained, peoples wages become worth more and more over time. Always have always will.

We'll just ignore those millions of people who became destitute in nations ravaged by inflation, shall we. There was a famous example - which in your fantasy world we can ignore as well - from a little while ago, in this country called Germany, where the end result was a small conflict called World War 2.


For a single weeks minimum wage in 20 years from now, I could purchase goods and services unimaginable to me now.

It's amazing, you can read the future! But for some reason, it's an "unimaginable" future - that doesn't make sense, if you can read the future then surely it's imaginable. But let's say you *can* read the non-unimaginable future, instead of wasting time here, shouldn't you get yourself to the TAB and use that amazing superpower of yours to win on the horses?

[bull....]

No Ass, prices will DECREASE in real terms as they have for 5000 years.

It's called productivity and rising standard of living over time.

Just about everything will become cheaper per hour worked over time as it always has.

In 50 years time people could not conceive of living how we live now. For their annual salary they will be able to purchase far more in terms of goods and services than we can now.

try telling that to my kids about everything is cheaper today than 40 yrs ago. they laugh you out the room

[SailorRob]

try telling that to my kids about everything is cheaper today than 40 yrs ago. they laugh you out the room

Bull, you should have educated them. Perhaps it's not too late.

So their standard of living is lower than yours was 40 years ago, Damn where the they live? Tell them to move home.

[LaserEyeKiwi]

Weekly Update:

13950

[winner69]

Electronic Card Spend ex Stats NZ an indication how things are going

For month of June v last year

Core Retail...........UP 0.8%
Fuel....................UP 14.7%
Vehicle exc fuel....DOWN 5.0%
Total Retail..........UP 1.9%


Annual sales to June this year v last year

Core Retail...............DOWN 1.1%
Fuel........................UP 4.4%
Vehicle ex fuel..........DOWN 4.6%
Total Retail..............DOWN 0.7%

[LaserEyeKiwi]

Electronic Card Spend ex Stats NZ an indication how things are going

For month of June v last year

Core Retail...........UP 0.8%
Fuel....................UP 14.7%
Vehicle exc fuel....DOWN 5.0%
Total Retail..........UP 1.9%


Annual sales to June this year v last year

Core Retail...............DOWN 1.1%
Fuel........................UP 4.4%
Vehicle ex fuel..........DOWN 4.6%
Total Retail..............DOWN 0.7%

June Core retail being up year on year is pretty good all things considered. Annual core YTD sales being down just 1.1% not too bad either considering the big impact of Omicron in first quarter.

However of course inflation likely squeezing margins with these figures, particularly for businesses with large wage & local transport cost components.

[bull....]

are volumes up or is it just
increase in sales just because everyone put there prices up ?

[bull....]

just as we thought retail is going backwards its only price rises making it look steady

"That’s constraining the volume of goods that households can purchase. In other words, while our nominal spending levels may be holding broadly steady, the amount of retail goods we’re actually buying is going backwards."

https://www.interest.co.nz/business/116699/statistics-new-zealand-says-retail-spending-excluding-fuel-dropped-03-june

run for the hills those retail stocks i guess will be reporting bad figures by feb/mar reporting period

[Waltzing]

If this guy is right there is going to be a continued retail buying boom even with inflation...

https://www.cnbc.com/2022/07/15/millennials-are-to-blame-for-sky-high-inflation-strategist-says.html

[LaserEyeKiwi]

If this guy is right there is going to be a continued retail buying boom even with inflation...

https://www.cnbc.com/2022/07/15/millennials-are-to-blame-for-sky-high-inflation-strategist-says.html

Its almost like he is taking the piss - blaming millennials for spending too much money.

[LaserEyeKiwi]

Weekly Update:

13971

[clearasmud]

A very good week in a down week.

[Waltzing]

"blaming millennials for spending too much money."

classic !!!!

yep its all good now... retail is back.. beside something really odd happening in canada something to do with it being an almost other worldly place.

[LaserEyeKiwi]

I think it’s justifiable to say the retail sector is probably going to underperform on an adjusted for inflation growth basis, but on a nominal basis it has a far easier job.

But a lot of retail stocks seem to be pricing in big reductions in revenue - on a nominal basis even. I’m not confident that sector wide retail is going to have good growth over next 12 months, but I am not thinking revenue is going to go backwards when prices of goods are pushing higher at a fast pace everywhere presently.

[Waltzing]

all depends if things go topsy turvy in the world but other wise a very balance view to consider...

people still want to get on with life and do stuff...

[Waltzing]

Well today the market is ripping with earnings up and retail looking like those US shoppers just dont know what world they are living in...

GO USA ....

LEK might be right after all ....

one economic investor consultant mentioning 5% unemployment required to bring down inflation...

No 100 basis point hike on the table apparently.

[Habits]

Weekly Update:

13971

Thanks for update LEK other than BRG some good sector gains

[Habits]

Its almost like he is taking the piss - blaming millennials for spending too much money.

Young always have been consumers and retail spenders. Its when you get a mortgage that that changes

[winner69]

RetailWatch June data out

Changes over June last year below

Fuel and Travel big increases .... rest pretty dismal (considering inflation)

[Rawz]

RetailWatch June data out

Changes over June last year below

Fuel and Travel big increases .... rest pretty dismal (considering inflation)

Holy smokes that travel increase!!! (probably off a small base).

No wonder AIR CEO, G Foran, is buying millions worth of his company. Kiwis love to fly and have been cooped up in the nest for awhile now

LEK might have to add AIR to the retail update

Thanks for posting Winner(n)

[winner69]

Holy smokes that travel increase!!! (probably off a small base).

No wonder AIR CEO, G Foran, is buying millions worth of his company. Kiwis love to fly and have been cooped up in the nest for awhile now

LEK might have to add AIR to the retail update

Thanks for posting Winner(n)

Yes raws travel spend on a roll

June20 was 151m and June 21 it was 259m and last month 478m

Pre-covid average month was about 470m so getting back to normal eh

Entertainment probably fans buying Ed Sheeran and Gun N Roses tickets lol

[LaserEyeKiwi]

Holy smokes that travel increase!!! (probably off a small base).

No wonder AIR CEO, G Foran, is buying millions worth of his company. Kiwis love to fly and have been cooped up in the nest for awhile now

LEK might have to add AIR to the retail update

Thanks for posting Winner(n)

I have plenty of MCK shares for the inevitable bounce back to normalcy in tourism.

[LaserEyeKiwi]

KMD loses Kathmandu CEO:

https://www.nzx.com/announcements/395545

[LaserEyeKiwi]

Weekly update:

14005

[LaserEyeKiwi]

International shipping costs continue to drop:

14007

[Waltzing]

Countries seem to be putting pressure on those blocking sea lanes to get supply chains moving.

Human business models are not eco friendly and will continue to put pressure on margins going forward.

Having said that inflation may well have peeked and if so well... it's back to the races, where are the oysters and champagne...french please...

[Waltzing]

winner(n) , index of retail prices.

how it going ...

[LaserEyeKiwi]

Walmart downgrades its guidance:


Walmart (https://data.cnbc.com/quotes/WMT?view=franchise) on Monday cut its quarterly and full-year profit guidance, saying inflation is causing shoppers to spend more on necessities like food and less on items like clothing and electronics.

The big-box retailer said it now anticipates adjusted earnings per share for the second quarter and full year to to decline around 8% to 9% and 11% to 13%, respectively. It had previously expected them to be flat to up slightly for the second quarter and to drop by 1% for the full year.

Inflation has grown at the fastest pace in four decades (https://www.cnbc.com/id/107088004?view=story). As consumers face higher prices at the gas pump, grocery store and restaurants, some customers have begun to make choices of where to spend money and where to pull back. (https://www.cnbc.com/id/107077476?view=story)

Walmart said more customers are turning to its stores, which are known for low prices, to fill their pantries and fridges — but they are skipping over general merchandise that they can live without

[winner69]

Restaurant brands guidance says reduced profits from covid staff shortages and rampant cost increases

https://www.nzx.com/announcements/395951

[bull....]

Restaurant brands guidance says reduced profits from covid staff shortages and rampant cost increases

https://www.nzx.com/announcements/395951

massive cost increases DUE TO INFLATION . mc d's said the same thing in the US