So where is the Amazon gloom about Australian retailing after retail sales rose solidly for a second straight month in May. As a result the gloom was forgotten and up went the shares of retailing stocks large and small yesterday.
We’ve been subjected to a couple of months or doom and gloom (and some realty checks about the silly obsession with online retailing) about the damage the arrival of Amazon will do when it arrives in Australia – so down went the shares of retailers large and small.
Several weak trading updates didn’t help – especially from the likes of OrotonGroup, Super Retail, AP Eagers, The Automotive Group, The Retail Food Group, The Reject Shop, RGC, plus an odd bid for The Speciality Fashion Group didn’t help sentiment towards retailing stocks among investors.
The 1% rise in seasonally adjusted retail sales in April was ignored as a ‘one off’ but then yesterday the Australian Bureau of Statistics revealed a stronger than expected 0.6% jump in May retail sales, and suddenly investors couldn’t get enough retailing shares.
Speciality Fashion shares leapt 8.8%, Myer shares jumped 3.6%, Automotive Holdings shares were up 3%, fellow car dealer AP Eagers, 2.3% (and 14% and 10% in the past fortnight). The Reject Shop shares were also up nearly 3%, Super Cheap shares rose 4% and JB Hi-Fi and Harvey Norman shares (both have been top of many lists as Amazon’s chief victims) saw 5% price surges yesterday.
Woolworths’ shares ended up 1.5%, Wesfarmers shares gained 1.8% and even the struggling OrotonGroup saw a 1.4% rise. Retail Food Group shares jumped 2.8% in something of a relief from the recent run of gloom.
The seasonally adjusted 0.6% rise in retail sales beat market expectations of a 0.2% rise. April’s 1% rise was the biggest jump in monthly spending in two-and-a-half years. May’s data showed the monthly improvement was led by a bounce in housing-related expenditure items.
Household goods spending rose by a strong 2.2%, spread across gains in electrical and electronic goods, furniture, housewares, hardware, and building and garden supplies. Cafe, restaurant and fast food sales were up 0.6%, continuing the sector’s solid strength for the past year or more. But department store sales dropped 0.7% from April and yet Myer shares ended higher.
