Which ASX retail shares are affected by the bushfires?

The Australian bushfires are having a massive impact on the country and the economy. These ASX retail shares have also been affected.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Australian bushfires are taking a terrible toll on the Australian population, wildlife and landscape. However, amidst all of the chaos, we are coming together as a country. 

While many individual, business and large corporate donations have been received from across the globe, Moody's Analytics estimates that the impact of the fires on the economy will far surpass the $4.4 billion record set by the 2009 Black Saturday fires.

While the impact of the ongoing bushfire crisis on ASX agriculture shares has been widely reported on, there are also a number of ASX retail shares that have been, or are likely to be, impacted by the fires.

Here's a closer look at 3 such companies and how they have fared so far.

Mosaic Brands Limited (ASX: MOZ)

Mosaic Brands is an Australian retailer that owns a number of household clothing retail brands such as Millers, Rockmans, Noni B, Rivers, Katies and W Lane. Amid already challenging conditions for retailers, Mosaic was one of the first companies in the ASX retail sector to release a trading update regarding the bushfires.

The update noted that their December/January period, considered to be a key trading period, was considerably impacted by the ongoing bushfire tragedy. It noted that 20% of stores were directly impacted and 32% of the company's stores are located in regional areas where consumer confidence has been particularly fragile.

Mosaic's earnings before interest, tax, depreciation and amortisation (EBITDA) for the first half of FY20 was up 13% compared to the same period last year. Given the extraordinary factors impacting this first half, the business reports that it is confident in its ability to demonstrate higher growth in the second half.

The Mosaic Brands share price has plummeted more than 23% across the past 5 days in light of the company's exposure to the bushfire crisis and as investors digest the retailer's latest update.

Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW)

With the figure continuing to rise, it is estimated the bushfires have burnt through 10.7 million hectares of land – including prime farmland where seasonal produce crops were growing and livestock were grazing.

This devastation will result in reduced supply of these goods to all retailers, including major supermarkets such as Coles and Woolworths. Usually, reduced supply would result in a retailer increasing prices, however, Coles and Woolworths have both come under intense government pressure to pass on the expected price hikes of fresh produce, milk and red meat to the farmers.

Additionally, the recent closure of the Eyre Highway for 12 days prevented the transport of goods between the eastern and western states, adding to supply issues. If the reduced supply of goods can't be fully offset by increased prices, these supermarket retailers could see some margin pressure during the period.

Thus far, neither supermarket giant has seen negative share price movement as a result of this anticipated impact. In fact, at the time of writing today both Coles and Woolworths shares are up 0.44% and 1.09%, respectively. Both shares will be worth watching as the ongoing crisis unfolds. 

The big picture

Ultimately, the safety and wellbeing of communities, wildlife and the environment is the most important thing. But financial stress can also be a very real cause of anxiety – in the best of times, let alone in times such as this. In my opinion, a portfolio of high quality, well diversified stocks and ETFs is a great way to give you choices and help reduce your financial stress.

Additionally, if you aren't directly impacted by the fires, you may have the time or the financial freedom to volunteer or to donate. If you can, I would urge you to do both.

Motley Fool contributor Lloyd Prout has no position in any of the stocks mentioned and expresses his own opinions. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

3 small-cap ASX healthcare shares 'with strong prospects'

Fund manager IML discusses why these 3 ASX healthcare shares are likely to rise in value.

Read more »

Magnifying glass on a rising interest rate graph.
Share Market News

Will the RBA finally cut interest rates next week?

Let's see what economists are saying about the central bank's meeting.

Read more »

A couple sits on a sofa, each clutching their heads in horror and disbelief, while looking at a laptop screen.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors endured a rough Friday to close the trading week today.

Read more »

a man wearing old fashioned aviator cap and goggles emerges from the top of a cannon pointed towards the sky. He is holding a phone and taking a selfie.
Broker Notes

7 ASX All Ords shares elevated to 'strong buy' status in October

The brokers turned bullish on these ASX companies last month.

Read more »

A businessman compares the growth trajectory of property versus shares.
Share Market News

How ASX shares vs. property performed in October

The national home value rose for the 21st consecutive month while the ASX 200 dipped.

Read more »

Person with thumbs down and a red sad face poster covering the face.
Share Fallers

The worst 3 ASX 200 stocks to buy and hold in October unmasked

You would have done well to avoid these three ASX 200 stocks in October.

Read more »

A female Woolworths customer leans on her shopping trolley as she rests her chin in her hand thinking about what to buy for dinner while also wondering why the Woolworths share price isn't doing as well as Coles recently
52-Week Lows

Why is the Woolworths share price at its lowest point since 2020?

We haven't seen Woolies shares this low since COVID.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why AFT, Amcor, Corporate Travel, and Macquarie shares are falling today

These shares are ending the week in the red. But why?

Read more »