It’s been a tough start to 2022 for many ASX retail shares. Data released today shows just how tough it has been for Australian shops, and also provides mixed forecasts for the future.
The S&P/ASX 200 Consumer Staples Index (ASX: XSJ) has been underperforming the market over the course of 2022 so far, slumping 9%.
For context, the S&P/ASX 200 Index (ASX: XJO) has fallen 5% over that time.
Here’s what the future looks like for Australian retailers and, as an extension, ASX retail shares.
Data highlights tough January and mixed outlook
Data detailing how tough January was for retailers has dropped today, and it’s not a particularly pretty picture.
The Commonwealth Bank of Australia (ASX: CBA) announced that its Household Spending Intentions (HSI) index fell 10% last month, with retail spending intentions leading the fall with a 20.9% dip.
However, that fall followed a rallying over the previous months, landing retail spending intentions 4.4% higher than in January 2021.
Additionally, CBA noted credit card data highlighted an uptick in consumer spending in early February.
That’s potentially juxtaposed with Australia and New Zealand Banking Group Ltd (ASX: ANZ) and Roy Morgan. They found consumer confidence fell 1.9% over the first week of February.
ANZ head of Australian economics David Plank said the drop in consumer confidence was likely due to anticipation of rising interest rates and Western Australia’s bushfire events, COVID-19 outbreak, and continued border closure.
The pendulum also swung for Australian’s financial positions. Just 23% of Australians said their families are ‘better off’ financially than this time last year – representing a 4 point drop. That’s compared to 32% who said their families are ‘worse off’ – a 4 point increase.
Looking to the future, 35% – 2 points fewer – believe their families will be better off this time next year. On the other side, 21% – 3 points more – expect they’ll be worse off.
Finally, the latest monthly business survey conducted by National Australia Bank Ltd. (ASX: NAB) found business conditions had fallen 5 points in January with profitability, trading conditions, and employment all slipping lower.
Retail was once again among the hardest hit, falling 38 points.
In more positive news, business confidence rose 15 points in January after falling in December.
NAB chief economist Alan Oster said Australia’s economy is experiencing “a period of elevated inflation while supply chain issues remain unresolved”.
“Overall, the January survey shows significant disruption to business activity from the spread of the Omicron variant, albeit impacts on businesses were less severe than in past outbreaks,” said Oster. “However, we continue to expect a strong recovery as case numbers come down.”
How are ASX retail shares performing today?
Tuesday’s session brings a mixed performance from ASX retail shares.
The Nick Scali Limited (ASX: NCK) share price has fallen 7% while that of Best & Less Group Holdings Ltd (ASX: BST) and Accent Group Ltd (ASX: AX1) are down 4.1% and 1.9% respectively.
Meanwhile, the Super Retail Group Ltd (ASX: SUL) share price is 2.8% higher, while stock in Adairs Ltd (ASX: ADH) and JB Hi Fi Limited (ASX: JBH) is up 1.3% and 0.6% respectively.
For context, the ASX 200 is currently up 0.8% while the All Ordinaries Index (ASX: XAO) has gained 0.7%.
The post ASX retail shares have slumped in 2022. Could there be more pain to come? appeared first on The Motley Fool Australia.
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More reading
- Why is the Nick Scali (ASX:NCK) share price dumping 13% so far this week?
- 2 ASX retail shares going cheap: Fund manager
- 2 ASX dividend shares with big yields to buy
- Got money to invest for dividends? Here are 2 ASX shares that could be buys
- 2 quality ASX dividend shares for income investors to buy
Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended ADAIRS FPO and Super Retail Group Limited. The Motley Fool Australia owns and has recommended ADAIRS FPO and Super Retail Group Limited. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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