Soft spending: How ASX retail shares are responding to a weak month

Australians spent more on clothing in April but reduced their food and household goods expenditure.

Woman thinking in a supermarket.

Image source: Getty Images

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Key points

  • Retail spending is on a downward trend in 2023, with figures for April showing flat trading overall 
  • Only two categories of retail spending rose in April - clothing, footwear, and personal accessories (up 1.9%) and department stores (up 1.5%)
  • Food spending at shops, cafes, and takeaway outlets fell for the first time in 14 months 

It's a mixed-bag performance among ASX retail shares on Friday following the release of retail sales figures from the Australian Bureau of Statistics (ABS).

Retail sales were flat overall in the month of April, following very small increases in March and February.

The bottom line is that retail sales are slowing in 2023, as the impact of rising inflation and interest rates starts to flow through the economy.

ABS head of retail statistics Ben Dorber said:

Retail turnover has plateaued over the last six months as consumers spent less on discretionary goods in response to cost-of-living pressures and rising interest rates.

Spending was again soft in April but was boosted by increased spending on winter clothing in response to cooler and wetter than average weather across the country.

What does weaker spending mean for ASX retail shares?

Household consumption is worth about 50% of Australia's gross domestic product (GDP), so that's why retail sales are an important yardstick for our economic health.

The data also provides insight into the categories of retail that are receiving more of our dollars.

According to today's figures, only two categories recorded higher spending in April. They were clothing, footwear, and personal accessories (up 1.9%) and department stores (up 1.5%).

Household goods spending declined by 1% — its third consecutive monthly fall.

We also saw the first fall in food spending following 13 months of increases. Spending at cafes and takeaway outlets fell by 0.2%, and general food shopping declined by 0.1%.

On the market today, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) is among six out of 11 market sectors on the rise, up 0.33%. Meantime the S&P/ASX 200 Index (ASX: XJO) is up 0.07%.

Here are the risers and fallers among ASX retail shares on Friday, and how they're trending year to date (YTD).

Rising retail shares on Friday

Some of the top risers among ASX retail shares today are:

  • The Dusk Group Ltd (ASX: DSK) share price is up 3.3% to $1.10, but down 41% YTD
  • The Domino's Pizza Enterprises Ltd (ASX: DMP) share price is up 3.2% to $47.16, but down 29% YTD
  • The Lovisa Holdings Ltd (ASX: LOV) share price is up 1.4% to $21.37, but down 7% YTD
  • The Adairs Ltd (ASX: ADH) share price is up 2.4% to $1.91, but down 16% YTD

Falling retail shares on Friday

Some of the fastest fallers among ASX retail shares today are:

  • The Universal Store Holdings Ltd (ASX: UNI) share price is down 5.1% to $2.98, and down 43% YTD
  • The City Chic Collective Ltd (ASX: CCX) share price is down 5% to 38 cents, and down 17% YTD
  • The Mosaic Brands Ltd (ASX: MOZ) share price is down 5.3% to 18 cents, and down 36% YTD
  • The Mighty Craft Ltd (ASX: MCL) share price is down 5% to 9.5 cents, and down 47% YTD

Hitting 52-week lows today

The ASX retail shares hitting 52-week lows today include Mighty Craft shares, which dipped to 9.3 cents in earlier trade, Redbubble Ltd (ASX: RBL) shares at 38 cents, and Elixinol Wellness Ltd (ASX: EXL) shares at 1.4 cents.

Motley Fool contributor Bronwyn Allen has positions in Domino's Pizza Enterprises, Dusk Group, and Elixinol Wellness. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Adairs, Domino's Pizza Enterprises, Lovisa, and Redbubble. The Motley Fool Australia has positions in and has recommended Adairs. The Motley Fool Australia has recommended Domino's Pizza Enterprises, Dusk Group, and Lovisa. 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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