Which ASX retail shares are the latest trade winners?

The Australian Bureau of Statistics provides a deep dive into the drivers of retail trade in April. Here’s a snapshot.

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The Australian Bureau of Statistics (ABS) has released its official retail trade figures for April, highlighting a 1.1% increase compared to March, on a seasonally adjusted basis.

The results were unchanged from its preliminary retail trade data released on 21 April. Included in the official release were the industries driving the uptick in retail turnover.

Broadly speaking, ASX retail shares managed to rally strongly throughout March and April, in many cases hitting record all-time highs. However, by mid-April and May, many were struggling to hold onto gains and edged lower.

Here’s a snapshot of which industries and subgroups lifted retail trade in April, and how some of the ASX retail shares are faring.

Latest retail trade results

Food retailing

Food retailing increased 1.4% in seasonally adjusted terms. By industry subgroup, supermarket and grocery stores, liquor retailing and other specialised food retailing rose a 1.2%, 3.0% and 1.1% respectively.

Things were going well for the Woolworths Group Ltd (ASX: WOW) share price until its third-quarter update on 29 April. Its shares tanked more than 5% between 29 April and 3 May from $41 to $39. The Woolworths share price has since made a bullish recovery and, at $43.33 today, is within cooee of its February record all-time highs of $43.85.

The third-quarter update highlighted a 0.7% fall in Australian Food sales against the prior corresponding period. However, the company registered a strong performance across its Big W, Endeavour Drinks and Hotel businesses.

Household goods retailing

Household goods increased 1.5% in seasonally adjusted terms. Key subgroup drivers include a 3.0% increase in electronic goods and 1.7% increase in furniture, floor coverings, houseware and textile goods retailing.

Despite the improvement in household goods, some previous high-fliers in this group — including JB Hi-Fi Ltd (ASX: JBH), Kogan.com Ltd (ASX: KGN) and Harvey Norman Holdings Ltd (ASX: HVN) — experienced sharp selloffs in April. This is possibly driven by a period of tough comparables against supercharged COVID-19 driven earnings in FY20.

This was especially the case for Kogan, where its shares have tanked almost 50% year-to-date. The company’s disappointing trading update in May flagged inventory challenges, likely driven by the anticipation that heightened sales would continue.

Cafes, restaurants and takeaway food services

Cafes, restaurants and takeaway food services improved 2.3% in April, driven by a 4.4% lift in takeaway food services, while cafe, restaurants and catering services edged 0.6% higher.

According to ABS data, turnover for cafe, restaurants and takeaway food services has toppled pre-COVID highs of about A$3,935 million in February 2020, after the latest figures came in a A$4,125 million.

This aligns with the recent bullish share price action of Dominos Pizza Enterprises Ltd (ASX: DMP). Its shares are up 20% since April and set a new all-time record high on Thursday of $117.96.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd and Woolworths Limited. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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