Anecdotal evidence suggests it's not shaping up to be a particularly fruitful Christmas for retailers this year which won't do any favours for the already beaten down share prices of the likes of department store Myer Holdings Ltd (ASX: MYR) which is trading at an all-time low, or for specialty retailer Super Retail Group Ltd (ASX: SUL) which is trading at a multi-year low.
There are however a few retail-exposed businesses which could continue to do well over the Christmas period…
According to a recent survey by leading research organisation Roy Morgan, 53% of Australians read one or more catalogues in an average week. What's more, 56% of catalogue readers go on to buy a product as a result of seeing it in the catalogue!
That's a great success rate and highlights the strong pulling power this form of traditional advertising still has. The strength of this particular media would also suggest that retailers would be foolish to reduce their spending in this segment over the critically important festive season particularly this year given the sluggish state of consumer sentiment.
The continuing popularity and usefulness of catalogues is also great news for the two listed direct marketing firms which provide the bulk of catalogue services to Australian retailers, namely PMP Limited (ASX: PMP) and Salmat Limited (ASX: SLM). The share prices of both firms have struggled over the past five years, however perhaps these latest findings by Roy Morgan will encourage value-seeking investors to revisit these stocks.
Another Roy Morgan survey which has also just been released highlights another segment of the retail market which is also still enjoying good support – shopping centres. The survey which focussed on Victoria found that nearly 60% of the state's residents aged over 14 purchased something from a Melbourne shopping centre in an average four-week period. Of note, four of the ten most popular Melbournian shopping centres were Westfield Malls owned by Scentre Group Ltd (ASX: SCG).
