Last month was a shocker for many S&P/ASX 200 Index (ASX: XJO) retail shares. Here's how some of the market's biggest retailers performed in June:
- Wesfarmers Ltd (ASX: WES) – fell 11%
- Harvey Norman Holdings Limited (ASX: HVN) – fell 15%
- JB Hi-Fi Limited (ASX: JBH) – fell 16%
- Premier Investments Limited (ASX: PMV) – fell 14%
- Super Retail Group Ltd (ASX: SUL) – fell 10%
For context, the ASX 200 slipped 8.9% last month. Interestingly, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) outperformed slightly, falling just 7.3%.
So, what might have dragged these ASX 200 retail shares lower last month? Let's take a look.
What went wrong for ASX 200 retail shares in June?
Many major ASX 200 retail shares underperformed in June amid rising interest rates.
The Reserve Bank of Australia (RBA) upped the benchmark interest rate by 0.5% for the second consecutive month in early June. That saw Australia's interest rate sitting at 0.85%.
Additionally, RBA Governor Philip Rowe noted further hikes can be expected through the rest of 2022 as the regulator bears down on inflation.
Of course, rising rates generally slow the economy and leave consumers' pockets feeling lighter. Thus, rate hikes may reduce Australians' retail spending.
Indeed, National Retail Association CEO Dominique Lamb dubbed the RBA's move "heavy-handed" last month, saying:
Many retailers are watching consumer confidence rapidly slipping [amid] a raft of increasing costs and external factors such as the cost of fuel, power … increasing wages, and supply chain issues.
But last month's tumble didn't mark a turn-around for ASX 200 retail giants. They've struggled through most of 2022 so far.
Shares in Wesfarmers – the conglomerate behind Bunnings, Kmart, and Officeworks – have slipped 30% year-to-date. Harvey Norman and JB Hi-Fi's stock have also slumped 23% and 19% respectively.
Meanwhile, stock in Super Retail Group – the owner of the likes of BCF and Supercheap Auto – and Premier Investments – behind brands such as Smiggle, Peter Alexander, Just Jeans, and Dotti – have slipped 31% and 35% respectively.
