This morning the Australian Bureau of Statistics released its retail sales data for January.
According to the release, sales grew 0.1% to $2,623 million in January in seasonally adjusted terms. This was well below economists' forecasts for an increase of 0.4%. On an annual basis this means that retail sales have grown 2.1%.
Not all areas of the retail sector performed so poorly. The best performing area was other retailing which rose 1%. This vaguely named area of the market includes pharmaceutical, cosmetic, and toiletry goods retailing, which all performed well. Whereas recreational goods retailing acted as a drag during the month.
This could be interpreted as a positive for the likes of Sigma Healthcare Ltd (ASX: SIG), Australian Pharmaceutical Industries Ltd (ASX: API), and BWX Ltd (ASX: BWX), but potentially a negative for Super Retail Group Ltd (ASX: SUL).
Two of the worst performing areas of the retail sector during January were clothing, footwear, and personal accessories and department stores.
The former saw sales decline 0.7% during January and the latter experienced a 0.6% decline in sales.
Unfortunately, any hope that the Myer Holdings Ltd (ASX: MYR) performance had improved since Christmas is likely to have been dismissed with this data. This is one area of the market which I think investors ought to avoid.
Finally, household goods and cafes, restaurants, and takeaways experienced an increase of 0.1%, whilst food retailing was relatively unchanged. Making it a reasonably average month for the likes of Domino's Pizza Enterprises Ltd. (ASX: DMP), Woolworths Group Ltd (ASX: WOW), and Wesfarmers Ltd (ASX: WES).
Foolish takeaway
Out of all the retail shares mentioned throughout I would pick BWX as my first preference. I think its cheaper price and solid long-term growth prospects make it worth considering today.
