While retail shares are often maligned for their lack of competitive position (did someone say Amazon?) and vulnerability to fast-changing consumer tastes, some very strong performers over the past 5 years have been retail shares.
Here are 3 that have a track record of performance and could keep on delivering for shareholders:
JB Hi-Fi Limited (ASX:JBH)
Operating in the fast-moving consumer electronics space, JB Hi-Fi has not just survived, it has thrived and outlasted many of its competitors including Clive Peeters, Dick Smith, and WOW Sight and Sound. The result has been attractive growth in profits over the past 5 years and JB shows no sign of slowing down.
While the industry remains highly competitive, new ventures in homewares, the strength of the JB brand, and the modest price place the company in an advantageous position for the future.
Collins Foods Ltd (ASX:CKF)
Judging by the results of Collins' 180 KFC franchises, the fried chicken recipe must indeed be finger-lickin' good. Collins' strategy of acquiring KFC restaurants and improving their operations has been successful at driving the company's earnings higher over time. Collins continues to acquire restaurants including several in western Europe, while also focussing on the growth of its Sizzler franchise in Asia (the Australian operations unfortunately appear in terminal decline) and its nascent Snag Stand business.
Collins carries medium levels of debt and appears to grow predominantly through acquisition, which makes it important not to overpay. Collins appears fairly priced in my opinion.
Greencross Limited (ASX:GXL)
This vet and pet retailing business is attempting to consolidate part of the fragmented industry – currently it owns around 6%. Greencross is doing this through a variety of initiatives including acquiring new businesses, co-locating its vets inside its retail stores, investing in own-brand products, and more. So far the results speak for themselves, and Greencross now appears to be in a position where it can self-fund its growth going forwards, instead of relying heavily on debt like it did previously.
Although growth is expected to be more modest in future, Greencross' business could become significantly larger over the next decade.
