Australian retailing seems to have ground to a halt.
Yesterday we had the third retailer in almost as many days cutting sales forecast as consumers continue to shy away from shopping centres in the wake of five official lifts in interest rates.
Clive Peteers, the troubled Melbourne-based white goods retailer, joined the likes of Harvey Norman, Woolworths, Super Cheap Auto, Coles and Fantastic Furniture in revealing a sharp slowdown in the third quarter and especially March.
Fantastic has sliced its profit and sales estimate for the full year, while Woolies has halved its 2010 sales estimates to a range of 3% to 6% and Clive Peteers has cut its full year outlook
And on top of this the huge Westfield property group revealed that specialty stores in its 44 shopping centres across Australia experienced a dramatic slowing in sales growth in the quarter, while big supermarkets also saw a slowdown.
Westfield said sales in the March quarter were up just 0.3%, down sharply on the 3.3% growth in its specialty store sales through all of 2009, and is also down compared with the first quarter of the same year when specialty store sales (and other sales) were held up by the federal government’s stimulus spending.
Specialty stores sales were in fact up 4.5%, so the drop in the March 2010 quarter was far greater than the comparison with all of 2009 shows.
In contrast department store sales held up, rising 4.9% in the March 2010 quarter, against a 3.6% fall in the first quarter of last year.
Big supermarkets (Coles, Woolies, Aldi, etc) saw sales rise 0.2% in the latest quarter, compared with 3.0% in the 2009 first quarter.
Discount department stores (that’s Big W, Target, Kmart, etc) saw growth improve to be down 0.1%, against a fall of 4.5% a year earlier.
Cinemas though are booming, up 22% on a year ago when the rise was a sedate 6.8%.
The breakdown of specialty categories in Westfield’s
first quarter update yesterday
showed slowing positive growth, or falls compared with a year ago when the stimulus really helped. This is the same set of figures for the first quarter of 2009.
Only homewares seems to have done relatively better.
Clive Peeters yesterday said that its sales last month worsened.
"While full trading results for April 2010 are not yet available, April sales have further deteriorated with the result that the April 2010 operating loss after tax is likely to have increased compared to previous months," the company said.
The news saw the shares plunge 39% to 13c, a loss of 8.5c on the day, a rotten fall for a company still fighting to regain its strength
The company was expecting to record an unaudited net operating loss after tax for the three months, January to March, of $4.5 million.
Clive Peeters was the victim of a $20 million fraud by an employee in 2009, and the business is still recovering.
Greg Smith, Managing Director, said “The combination of very subdued sales and margin pressures will materially impact the trading outlook of the Company over H2 2010, despite the Company’s successful cost reduction programme which it implemented over FY 2009 and has maintained over FY 2010 to date.
"The Company is still hoping for some improvement in retail conditions over the months of May and June 2010, which are traditionally stronger months in the second half of the financial year."
Coles chain Target, plus Big W and the Australian consumer electronics stores have seen same store sales fall now for two quarters in a row. Kmart sales bounced back in the quarter to be up 4% on all measures.
But Bunnings, the hardware giant also owned by Coles owner, Wesfarmers, saw a slowdown in March quarter headline and comparable cash sales.
But it was nowhere near the negative growth experienced by target and Big W, for instance.
