Retail trade increased 2.7% in June following a 16.9% rise in May as Aussies continued to spend despite the recession. The spending figures bumped up in June when physical stores reopened after being closed in the first round of coronavirus lockdowns.
But online retailers are also experiencing very solid demand. It seems government measures, including JobKeeper and JobSeeker, along with early access to superannuation withdrawals, have supported spending across the economy.
Despite the continued spending by consumers, purchasing patterns have shifted – we are buying different things in different ways. Products that make lockdown more comfortable have been in strong demand, including home furnishings, electronics, entertainment, and DIY supplies.
Consumers are increasingly sourcing their purchases online as movement outside the home is restricted. We take a look at 3 ASX retailers where consumers are spending.
Kogan.com Ltd (ASX: KGN)
Online-only retailer Kogan has seen a surge in sales since the pandemic first hit, with its faith in the digital channel paying off. Kogan retails everything from electronics, to toys, to homewares, and sells exclusively online.
The company saw sales surge in April and May, a trend that continued in June. It has now been four years since Kogan listed on the ASX at $1.80 a share, and since then the company has delivered four consecutive years of significant growth in sales and earnings. Shares are now trading at $19.02 with more than 2 million customers shopping at Kogan in the last 12 months alone.
Adairs Ltd (ASX: ADH)
Adairs is an omni-channel home furnishings retailer selling bed linen, manchester, soft furnishings and home accessories. Although it operates more than 160 physical stores across Australia and New Zealand, Adairs also has a strong online presence.
In the 24 weeks to 14 June 2020, Adairs grew online sales by 92.6%. Store sales grew 5.3% over the same period despite store closures between March and May. This gave total growth for the period of 27.4%, driven by consumers looking to upgrade their surroundings as they spend more time at home. The Adairs share price has surged in line with its sales, and quadrupling from its March low.
Temple & Webster Group Ltd (ASX: TPW)
Temple & Webster Group Ltd is an online only furniture and home accessories retailer which has seen stellar growth in the digital commerce boom.
Unaudited full year results show EBITDA up nearly 500% to $8.5 million as sales grew by 74% to $176 million. Many consumers stuck working from home have taken the opportunity to splurge on some new furnishings, giving Temple & Webster a 77% boost in active customer year on year. The Temple & Webster share price has surged accordingly, up more than 400% since March.
