There are many household retail names that are listed on the ASX, so we can get a good sense of the Australian consumer by seeing the business results and the comments of CEOs.
Just today, car dealership business Automotive Holdings Group Ltd (ASX:AHG) has reported a weaker-than-expected start to FY19, with net profit down 45%.
AHG's Managing Director, John McConnell, said "The entire private buyer market has been weaker, with the east coast, especially NSW and Victoria, being affected by a falling housing market and the negative flow-on effects to consumer confidence and auto sales".
Nick Scali Limited (ASX: NCK) managing director Anthony Scali recently warned that the furniture retailer's same store sale growth would be "challenging in this volatile trading environment".
Both of the above businesses have seen their share prices fall quite painfully over the past year.
But, it doesn't appear to be all doom and gloom out there in the retail sector. For example, JB Hi-Fi Limited (ASX: JBH) reported that JB Hi-Fi Australia had seen sales growth of 5.3% for the first quarter of FY18.
Earlier today Kathmandu Holdings Ltd (ASX: KMD) reported same store sales growth of 7.1% in Australia and Accent Group Ltd (ASX: AX1) increased its profit guidance for the first half of FY19.
Some businesses are reporting continued growth and others are facing difficulties. I suppose it depends on their respective client bases and how effective they are at retailing.
Perhaps Nick Scali's issues are a sign that the more well-off consumers are struggling.
Foolish takeaway
The Australian job market remains in a good state with the unemployment rate being 5% and wages growth picking up slightly in the latest quarterly figures. As long as the unemployment rate stays low then the consumer-facing shares shouldn't do too badly.
The share prices of many of these retailers are coming down, but I wouldn't want to jump on them just yet. I would rather wait until there is 'blood' on the streets considering house prices are likely to continue to fall and household debt will become more expensive with rising interest rates.
