Retail’s recovery story now plain to see

Shoppers have been back in force since Easter. Picture: Alex Coppel.

Finally the stock exchange and many of the economic commentators have been officially told the truth about the enormous rise in home improvement and appliance sales in the weeks after Easter.

Wesfarmers reports that in the five months to May 31, Bunnings’ sales rose by 19.2 per cent over the corresponding period last year.

While that is a massive sales rise, it masks the true extent of the increase in the final six weeks to May 31, after the Easter break.

In those six weeks, Bunnings sales rose at a much faster rate with most stores recording 30 per cent, 40 per cent and sometimes greater increases in turnover. And others in home improvement and appliances enjoyed the same boom. I first revealed the nation changing event on May 25. That commentary and those that followed helped share market prices.

Unfortunately the Australian Bureau of Statistics is way behind and most of the economic commentary out of Canberra relied on outdated ABS figures. Hopefully in coming days, other listed companies selling home appliances and home improvement products will reveal to the stock exchange this enormous rise in sales. And, in due course, the ABS will catch up.

The main reasons for this explosion in sales is that a lot of people continued with their previous income. Unprecedented amounts of cash were injected into the community through means including JobKeeper and people were spending more time at home. And with all the restrictions, that spending power was then concentrated on the home improvement and appliance area.

Online boomed, but so did store traffic. As yet we do not know whether the relaxation of restrictions will affect the level of spending in home improvement and appliances. However in an encouraging sign, Harvey Norman has continued with its massive print promotions in June. Clearly Harvey Norman expects high sales to continue, albeit perhaps not as well as in those dramatic six weeks to May 31.