Over the last two weeks, the corporate results rolled out for some of Australia’s largest businesses ranging from insurance, banking, retail, and telecommunications, providing a clear and brighter picture than expected and showing household spending is slowing, not disintegrating.
Additionally, consumers are demonstrating more resiliency than predicted, but the slowing of spending still shows the uneven affects of higher interest rates across the board for consumers and how its effecting their spending habits.
With inflation rising, and cost of living going up, expensive goods usually take a hit but instead shareholders have been nicely surprised with positive results from a variety of retailers like furniture retailer Nick Scali, JB Hi-Fi, and Cettire.
It’s not all good news, however, with retailers like JB Hi-Fi reporting sales had softened in July, but the reports were much more positive than expected, and the retailer was one of many to see a share price increase within 24 hours of its results.
In the hospitality and liquor sector, Endeavour which owns BWS liquor stores, Dan Murphy’s and over than 250 hotels, shared its sales growth has persisted to increase while Chief executive Steve Donohue said their bars were “pumping along”, according to the Syndey Morning Herald.
As for banks, there has not been a wave of consumers who cannot make their payments according to major Australian banks like Commonwealth Bank, National Australia Bank, ANZ Bank and Bendigo and Adelaide Bank who have all low bad debt charges.
Despite current debt charges being low for now, investing experts do think, however, debt charges will rise.
“The picture is emerging of an economy that’s holding up better than feared, and a consumer that’s holding up better than feared,” said UBS strategist Richard Schellbac.
Regardless of the promising recent results, Schellbac does caution that a further slowdown in household spending could occur in the months ahead and he wonders if we will see the same results at the end of the year or will consumer spending vanish just in time for Christmas.
