Remember that BDO fast data retail index that shows Budget damage? It’s not improving, from UBS via the SMH blog:
Weekly sales from the BDO Australian Retail Sales Index suggests sales through May have deteriorated across retail – down 6 per cent month-on-month – with fashion hit harder, down 7 per cent m/m.
“This data is consistent with recent trade feedback suggesting a material decline in sales across the fashion industry since the federal budget,” write the analysts.
Fashion retailers are most at risk of a slowing sales, including Premier Investments (owner of chains such as Just Jeans and Portmans), the department stores David Jones and Myer, discount stores such as Target, as well as Rebel (owned by the listed Super Retail Group).
It is important not to get too caught up in one month of retail data,” note the analysts. “However, soft sales during the key winter selling period inevitably leads to heightened promotional activity and margin pressure.”
“We would also note negative newsflow around the budget is likely to continue for some time, increasing the likelihood that weaker sentiment continues into FY15.”
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
