Retail giants stung by spending slowdown ahead of Black Friday, Christmas
Australians appear to be tightening their grip on their wallets at a brutal time for retailers, with fresh figures suggesting shoppers are holding out for discounts before the pre-Christmas spending rush.
Some of the country’s biggest retailers are reporting weaker trading heading into Black Friday and Christmas, with October proving particularly dismal for discretionary spending.
Some of the country’s biggest retailers are reporting weaker trading heading into Black Friday and Christmas. Max Mason-Hubers
Nine finance editor Chris Kohler said the focus across the market has zeroed in on retail giants battling challenging conditions.
“We know it remains a tricky market, so trading updates outlining that fact weren’t particularly surprising,” Kohler said.
“The companies behind Bunnings, Kmart, JB Hi-Fi, Rebel Sport, and BCF all slipped. The bosses were largely talking about moderating sales in the September quarter.”
Investors responded swiftly to the retail updates, with Wesfarmers shedding 4.9 per cent to $73.36 in early Thursday trade. Super Retail lost 3 per cent to $12.60, while JB Hi-Fi dropped 1.39 per cent to $70.77.
Cost-of-living pressures and expensive fuel are eating into household budgets, while bargain hunters are deliberately holding off until major discount events roll in.
“Importantly, that’s not the quarter that includes Black Friday, which sees sales boom nationally,” Kohler noted.
“Nine out of 10 Australians say they’ll shop the sales this year as saving a few dollars is high on the agenda.”
As reported in the Australian Financial Review, JB Hi-Fi revealed Australian sales fell 1.4 per cent in the three months to September 30 compared with a year earlier, while The Good Guys declined 0.4 per cent before weakening further into October.
Bunnings is also experiencing sluggish sales, with growth stalling in the three months to September 30. Getty
Bunnings is also experiencing sluggish sales, with growth stalling in the three months to September 30.
Kmart and Officeworks fared better, with first-quarter sales broadly in line with the same period last year.
At Super Retail Group – which owns Supercheap Auto, Rebel Sport, BCF and Macpac – like-for-like sales growth crawled to just 0.2 per cent across the September quarter, down from 2 per cent a year earlier.
Its outdoor brands took the brunt of the downturn: BCF fell 1.1 per cent, while Macpac plunged 11.7 per cent, which the company partly attributed to milder winter weather and promotion timing.
Supercheap Auto bucked the trend with a 2.5 per cent lift, while Rebel edged up 0.3 per cent.
The coming weeks will reveal whether Black Friday can coax hesitant shoppers into finally buying big-ticket items like appliances and electronics, or if households are cutting back for good.
Compounding the pressure is the Reserve Bank’s November 3 meeting, with another cash rate increase looming after inflation came in above the central bank’s target range.
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