‘Unprecedented’ growth for retailers
Despite the economic uncertainty created by the COVID-19 pandemic, the retail sector – particularly online retailers – saw “unprecedented” growth in the last six months.
Speaking at the Fidante Partners webinar, Catherine Allfrey, Wavestone principal and portfolio manager, said the fiscal stimulus had created a massive “cash splash” on Australian households.
“The Australian Government has actually stimulated the Australian economy to the tune of $170 billion over the last six months,” Allfrey said.
“They have provided early release to superannuation, made payments to small businesses, put in Jobkeeper and Jobseeker, and there’s been loan deferrals put on by the banks as well.”
Allfrey said while some Australians had saved, there were many that had gone on a spending spree, buying goods like TVs and lounges, and renovating.
“They also couldn’t get out of their homes to spend their money, so what did we do instead? We moved online,” Allfrey said.
“Harvey Norman, in the first half of 2020 couldn’t even get positive sales growth, but in the second half of 2020 sales grew nearly 20% and in July and August sales are up 40%.
“Because the state and international borders are shut, we’re out camping – BCF sales are up 70% in July and August.”
Best-performing ASX retailers over the last six months
According to FE Analytics, Wavestone had three funds, the Capital Absolute Return which lost 5.92% over the last 12 months to 31 August, 2020, the Australia fund (-6.30%) and the Dynamic Australian equity (-8.35%).
Performance of Wavestone funds over the 12 months to 31 August 2020
AUTHOR
Chris Dastoor
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