NZ food & liquor growth continued to accelerate (+6.8% YoY)
Statistics NZ released its Electronic Card Transactions data for May recently, and retail sales were strong across the board. Consumables (food & liquor) sales grew by 6.8% YoY. Growth was significantly above the ~3.5% average over the past 12 months and exceeded the +6.2% growth recorded in April. It was thought the very strong growth in April was a result of the timing shift of Easter but the strong May print suggests that the underlying trend has improved materially. Notably NZ accounts for ~7% of Woolworths’ group earnings (similar for Amatil). On a seq seasonally adjusted basis, consumables sales increased by 1.1%. If this trend persists, Woolworths is expected to report much stronger results from its NZ business in the June quarter.
Non grocery saw improvement in trend but still modestly below long run avg
Durable goods sales growth has been strong over the past 12 months May saw durable goods sales up 4.6%, which was a significant increase from the modest +2.3% recorded in April. We had expected a recovery in sales as April would have been weighed down by the timing of Easter due to the store closures on public holidays, however the trend remains modestly below the 12-month average of ~4.9%. Notably, the durables category provides only a loose read-through given it includes furniture, hardware, appliances, pharmacy, cosmetics, and toiletry items. Apparel sales returned to positive growth (+3.0%) in May, following a 4.0% decline in April. On a seq seasonally adjusted basis, durables sales were up 1.0%.
(This data set is released ahead of official retail sales (due on 14 Aug).
Download the complete report: http://pull.db-gmresearch.com/p/566-7B37/35212002/0900b8c08853db2c.pdf
