Australian retailers have reported a strong turnout in Boxing Day shoppers after what has been a rather bleak year as far as consumer confidence goes.
Despite a rising unemployment rate and doubts over the economy, thousands of shoppers flocked to retail stores across the country in search of some unbeatable bargains. In fact, Tony Sutton, Myer Holdings Ltd (ASX: MYR) executive general manager stores, even said the crowd looked like being its biggest in a decade, as reported by Fairfax media.
The strong turnout comes after a solid week of sales before Christmas where accounting firm BDO estimates that spending would have increased by 13% over the same period in 2013. Given that the most recent figures from the NAB online retail sales index shows that online sales have slowed down recently, the higher overall sales certainly bodes well for our traditional brick and mortar retailers.
BDO estimates that Boxing Day spending will have risen to $2.1 billion compared to last year's $1.9 billion, driven by factors such as the plummeting petrol prices as well as expectations of another rate cut at some point in the New Year.
It's important for investors to remember that strong foot traffic isn't a definitive measure of stronger sales (many won't buy a single item), but it is certainly a strong indication. Investors wanting exposure to the retail sector should look at stocks such as JB Hi-Fi Limited (ASX: JBH) and RCG Corporation Limited (ASX: RCG), which also offer fantastic dividends.
At $15.72, JB Hi-Fi yields 5.5%, fully franked, while RCG Corporation – the company behind The Athletes Foot – yields 7.2%, fully franked.
