Retail warnings are spreading like wildfire.
Unofficial numbers reveal sales at clothes and stationery outlets owned by Solomon Lew’s Premier Investments plunged 20% year over year in the final week of May.
Despite a better first week of June compared to the same period last year, overall sales for the parent company of Peter Alexander, Smiggle, and Just Jeans were still down.
Domino’s Pizza, which operates Doughnut King and Gloria Jeans, has warned that rising interest rates will negatively affect business. The company also released disappointing sales figures and commentary this week.
Spending on clothing and accessories decreased 7.4% in the first two weeks of June compared to the same time in May, but spending on travel and other “experiences” grew slightly, according to fresh statistics from Zip, the buy now, pay later company.
CEO of the 56-store Kidstuff toy business Mark Mezrani saw a dramatic change in customer behaviour beginning in May.
Discounts can be found at many different stores, including Target, Cotton On, Adore Beauty, Match, Estee Lauder, SurfStitch (a surfwear company), Adidas, and Domino’s Pizza.
Both Myer and its competitor David Jones are having massive stocktake sales with deep discounts on everything from clothing and shoes to home goods and electronics. DJs signalled last week that sales are down 30% year=on-year in some stores.
Wine brand Australian Vintage said on June 15 that the company will suspend its payout as a result of falling profits.
This is all entirely understandable given ongoing interest rate hikes and the fixed-fixed rate mortgage rest. Both have an outsized impact on discretionary income.
The RBA is likely to hike at least once more and, according to futures, it will be twice:
Only two-thirds of hikes have been passed on and the fixed-rate reset goes right through H2.
Worse is yet to come for retail.
