You'd think the robust rise in retail spending in August would be a boon for our listed retailers but the response from the market was extremely muted.
This is despite the fact that the increase in retail turnover was very widespread in the month with rises in five out of six categories, including the embattled department store sector.
But the news was only enough to push the S&P/ASX 200 Cons Disc (Index:^AXJO) (ASX: XDJ) index up 0.2%, which is about the same as the broader S&P/ASX 200 (Index:^AXJO) (ASX: XJO) benchmark.
While the share prices of Woolworths Group Ltd (ASX: WOW) and JB Hi-Fi Limited (ASX: JBH) are outperforming the market with a 1.7% and 0.5% gain in after lunch trade, shares in Harvey Norman Holdings Limited (ASX: HVN), Super Retail Group Ltd (ASX: SUL), Premier Investments Limited (ASX: PMV) and Domino's Pizza Enterprises Ltd. (ASX: DMP) have slumped firmly into the red.
The Australian Bureau of Statistics (ABS) said August retail turnover increased by 0.3%, which is better than the 0.2% that economists were expecting. The rise also compares well with the previous month when retail sales were flat.
"Cafes, restaurants and takeaway food services (0.7%) led the rises," said Ben James, Director of Quarterly Economy Wide Surveys.
"Rises were also seen in Clothing, footwear and personal accessory retailing (0.8%), Other retailing (0.4%), Department stores (0.9%), and Household goods retailing (0.2%). Food retailing was relatively unchanged (0.0%)."
South Australia recorded the biggest rise of 0.8% while Queensland was flat and the Northern Territory fell 1.3%.
But the retail gains may not be sustainable, and I think that's why investors haven't gotten too excited about the data.
The fall in property prices is accelerating at a time when mortgage rates look to be heading up. The near-term outlook for wage growth isn't great either while the spike in petrol prices look set to become a bigger than expected drag on consumer-facing stocks.
Meanwhile, the falling Australian dollar is likely to put upward pressure on prices and that's never a good thing for sales of discretionary products and services.
On the flipside… well there isn't much of one and that's the problem. Employment remains robust but there's little room for further meaningful improvements. The jobs market could tighten more and that may lead to better wages growth, but that'll take some time to come to pass.
There're also the personal and small business tax cuts but these will be offset by rising living expenses.
This is a tough environment for retailers to catch a lucky break.
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