How did ASX 200 retail shares perform in June?

Let’s examine how the month just past treated ASX 200 retail shares.

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Key points

  • Many ASX 200 retail shares underperformed in June, with stock in some of the sector's biggest names falling between 10% and 15% 
  • Their tumble came as the RBA upped interest rates in an effort to tackle inflation early in the month 
  • Though, it's worth noting that major ASX-listed retailers have struggled through most of 2022 so far 

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:

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.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman Holdings Ltd. and Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd., Super Retail Group Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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