Earlier this week National Australia Bank Ltd (ASX: NAB) released its NAB Cashless Retail Sales Index for the month of December.
That release revealed that the index rose 0.9% in December on a month-on-month basis, up from a 0.4% increase in November.
While this may sound reasonably positive, the bank has said that its "data mapping suggests that the official ABS measure of retail sales will record a negative print in December, forecast to be down 0.3%."
In light of this, the bank believes that the data is suggesting that retail spending for Christmas 2018 was fairly weak.
NAB chief economist Alan Oster said: "Consumer preferences continue to trend towards experiences at the expense of traditional consumer goods. Cafes, restaurants and takeaways remains the strongest performer on a year-on-year basis, followed by food, while department stores, clothing and footwear, household goods and other retailing are growing much more slowly."
This could be good news for the likes of quick service restaurant operators Collins Foods Ltd (ASX: CKF) and Domino's Pizza Enterprises Ltd (ASX: DMP), and also the supermarkets.
But which supermarket should you buy?
Based on current valuations, I would choose Coles Group Ltd (ASX: COL) ahead of Woolworths Group Ltd (ASX: WOW).
I'm not alone in thinking this way. A note out of Goldman Sachs this morning reveals that its analysts have retained their buy rating but cut the price target on shares slightly to $14.30 following its supply chain update.
Although Coles' capex cost of $950 million for its automated distribution centres came in materially higher than the broker's expectations, it thinks its shares are great value at 16.5x estimated FY 2019 earnings.
This isn't the case for Woolworths shares, which at 23x estimated FY 2019 earnings are looking a touch expensive now. Goldman has a neutral rating and $27.90 price target on Woolies' shares.
