New Data from the Australian Bureau of Statistics (ABS) showed that retail turnover increased by 0.7% in seasonally adjusted terms in June following a 0.4% rise in May.
The June figure is nearly double the 0.4% increase that economists polled on Bloomberg were expecting.
Electrical and furniture retailer Harvey Norman Holdings Limited surged 8.8% to a more than one-month high of $4.84 – making it the best performer on the ASX 200 index in early afternoon trade.
In the latest ABS data it was household goods retailing that proved to be the brightest star with the category growing by 2.2% as New South Wales led the states with 1% growth.
Next week JB Hi Fi is tipped to announce an increase in sales despite some CE categories slowing.
Embattled department store Myer also went up earlier today jumping 3.2% to $1.30 even though the ABS data showed that department store sales slipped 0.1% for the month.
Motley Fool said that “The fall wasn’t as bad as some had anticipated but that is hardly a catalyst for a re-rating in the stock as management is undertaking a rejuvenation program”.
This year JB Hi-Fi Limited is 20% up since January 2015 and is now trading at $19.46 with a further rise tipped next week.
Another CE retailer that analysts are watching is Dick Smith who yesterday confirmed what ChannelNews has been saying for several months in that they are finally expanding into consumer appliances, setting it up for head-to-head competition with JB Hi-Fi Limited and Harvey Norman as well as the The Good Guys and Bing Lee.
Dick Smith CEO told ChannelNews that he is looking to grab 10% market share in the $1.7 billion small appliances market which some analysts claim is an optimistic target as he has to firstly get access to several brands and then compete head on with the likes of Harvey Norman who recently expanded their range of small appliances.
The move comes as several appliance retailer admitted to ChannelNews that it was Aldi who was stripping appliance market share away from them a move which several said was “a real threat”.
CEO Nick Abboud told Fairfax media, “Just after Christmas a lot of suppliers will bring in products with apps – you won’t have to press buttons on those products, you’ll operate them through your phone or tablet or even get them on your smart TV . as we evolve that’s where electronics will end up.”
Dick Smith will establish a small appliance store under the ConnectedHome brand inside Dick Smith retail stores, which will sell toasters, kettles and coffee machines. The retailer plans to install ConnectedHome into 100 stores over the next five months, and will expand its range of personal care devices such as shavers and electric toothbrushes, and introduce new products such as blenders, vacuum cleaners, irons, fans and heaters.
JB Hi-Fi successfully branched into white goods a few years ago, so there doesn’t seem to be much reason why Dick Smith can’t do the same thing said Motley Fool.
They added “Yes, there will be more competition, but that will generally impact much more on the highest cost retailers, rather than those with ultra-low costs of doing business”
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