Remote working shift boosts dept store sales
The move to remote working has meant strong growth for stores such as JB Hi-Fi and Officeworks as consumers boost their technology needs while others prepare for self-isolation.
Many offices were closing to allow their workers to work from home while schools and universities were moving to online learning.
While the shares of these firms have fallen, they have suffered less than others with Wesfarmers down 18%, JB Hi-Fi down 25% and Harvey Norman down 33% against a 27% fall by the ASX 200 since the start of 2020 to 20 March, 2020.
In an announcement on the Australian Securities Exchange (ASX), JB Hi-Fi today said comparable sales growth during the period from 1 January to 22 March had 8.8%.
It said it expected this represented ‘strong momentum’ in Australia but that it would remove its full-year guidance in light of the uncertainty caused by COVID-19.
“The Company continued to see strong momentum in Australia through the quarter with an acceleration in recent weeks as both JB Hi-Fi and [subsidiary] The Good Guys provided retail customers with the essential products they need to respond to and prepare for the COVID-19 pandemic, including technology products that enable remote working, learning and communicating, and essential home appliances for food storage and preparation.”
For Harvey Norman, which released figures for the period from 1 January, 2020 to 17 March, 2020, comparable sales in Australia was 9.4%.
Appearing on 60 Minutes, co-founder Gerry Harvey said freezer sales were up 300% while air purifiers were up 100%.
Finally, Wesfarmers, which owns hardware store Bunnings and Officeworks, said it had seen strong growth in online sales.
“Since the start of the year, overall momentum in the Group’s retail sales has continued in line with the first half of the financial year. Strong sales growth has continued in Bunnings, Kmart and Officeworks supported by strong growth in online sales.
“In recent weeks, Bunnings and Officeworks, in particular, have played an important role providing retail and commercial customers with critical products as they respond to and prepare for COVID-19.
“This has seen significant demand for essential cleaning and hygiene products, home office equipment and technology and education supplies. The diversity and essential nature of many products and services provided by Bunnings, Kmart and Officeworks remain important to customers in a range of economic scenarios.”
Share price of Wesfarmers, JB Hi-Fi and Harvey Norman versus ASX 200 since start of 2020 to 20 March, 2020
AUTHOR
Laura Dew
Recommended for you
Pinnacle Investment Management has announced it plans to launch a new affiliate from a global equities team departing Royal London Asset Management.
Asset manager Nuveen is seeing opportunity in municipal bonds which are at their highest yields in over a decade.
With energy transition remaining a significant challenge, a global index provider executive has argued that engagement could trump divestment.
Aviva Investors is maintaining an underweight stance on the communications sector within its high yield allocation as it believes it faces a higher default rate.
