The Motley Fool

Low consumer spending hits retailers

The Australian Bureau of Statistics yesterday revealed the latest retail statistics for May, which did little to please investors. Despite seeing an increase of 0.1% in retail turnover for the month, compared to April’s 0.1% fall, a poorer than anticipated result saw a massive market sell-off.

The numbers reflect a poor consumer outlook and hint that confidence in the economy could be decreasing, particularly as the mining industry continues its slowdown. As the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) plummeted 1.86% yesterday, retail companies shares declined following the ABS’s release.

Specialty stores Myer (ASX: MYR) and David Jones (ASX: DJS) fell 2.9% and 1.94%, respectively, whilst Harvey Norman (ASX: HVN) also fell 2.86%. Along with the retailers themselves, property owners also felt the heat with shopping centre operator Westfield Group (ASX: WDC) falling 1.6%.

Whilst the data released by the ABS shows that consumers are currently not so willing to open their wallets, the news does not fare well for Westfield. Over the last 12 months, the company has been forced to cut their rent prices in order for specialty stores to be able to sustain payments. If consumers continue to lose their confidence in the market, then less spending will adversely affect Westfield in the long run.

The data showed increases in sales in department stores, food and other retailing as well as clothing, footwear and personal accessory retailing. These increases were largely offset by falls in cafes, restaurants and food services – which all contribute significantly to consumers attending shopping centres.

Meanwhile, The Australian Financial Review says “good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit.” Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading


Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

NEW. The Motley Fool AU Releases Five Cheap and Good Stocks to Buy for 2020 and beyond!….

Our experts here at The Motley Fool Australia have just released a fantastic report, detailing 5 dirt cheap shares that you can buy in 2020.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading over 40% off its high, all while offering a fully franked dividend yield over 3%...

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click here or the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!