If you're a fan of a particular brand or retail outlet, it can pay to look into the company behind it. Many of the products and services we consume are produced by companies trading on the ASX. As our consumption habits shift, so do the fortunes of the companies catering to them. By monitoring your own consumption you can gain insights into long term trends that can influence the way ASX shares perform.
Here we take a look at 7 ASX shares you probably already buy from.
Wesfarmers Ltd (ASX: WES)
Wesfarmers is behind a stable of retail brands including Bunnings, Officeworks, Kmart, and Target. The Wesfarmers share price has recovered strongly from the March downturn and it is now trading on par with February levels, i.e. near record highs.
Bunnings and Officeworks both saw a surge in sales as a result of lockdowns and the move to remote working. Consumers spent time and money setting up home offices and getting stuck into DIY. As a result, Officeworks' sales grew 27.8% in the second half and Bunnings' grew 19.2%.
Coles Group Ltd (ASX: COL)
Spun off from Wesfamers in 2018, Coles is behind 2,500 retail outlets nationally. This includes 800 supermarkets, 900 liquor stores, and more than 700 fuel and convenience retailers. The Coles share price remained relatively robust in the March correction, losing around 17% from peak to trough. Coles shares have now surpassed pre-Covid-19 levels and are trading near all-time highs.
Coles saw significant sales growth in the third quarter as the result of stockpiling and panic buying. Supermarkets sales grew 13.8%, with overall sales revenue up 12.9% to $9.2 billion.
Woolworths Group Ltd (ASX: WOW)
If you don't shop at Coles, there's a strong chance you shop at Woolworths, Australia's other major supermarket chain. Woolworths operates some 995 supermarkets across Australia. Including its liquor and Big W brands, Woolworths is behind some 3,000 stores across the country. The Woolworths share price fell 20% in the March dip, but has since recovered somewhat. It is still, however, trading down 10% from its February high.
Woolworths experienced a similar rush in sales to Coles in the third quarter. The Australian food business saw growth of 11.3%, Big W grew sales by 9.5%, and liquor also grew 9.5%. The Hotels business saw a 12.9% drop in sales with the closure of venues.
JB Hi-Fi Limited (ASX: JBH)
JB Hi-Fi is Australia's largest home entertainment retailer with almost 200 stores throughout Australia and New Zealand. JB Hi-Fi acquired The Good Guys in 2016, a home appliances retailer with a network of over 100 stores. The JB Hi-Fi share price has recovered strongly from the March downturn and is now just 3% down from its February peak.
JB Hi-Fi also saw a surge in sales in the third quarter as consumers set up home offices and searched for in-home entertainment. Australian JB Hi-Fi sales were up 20% in the half year to June. The Good Guys sales were up 23.5%. JB Hi-Fi New Zealand sales fell 19.3% as a result of closures during lockdowns.
Kogan.com Ltd (ASX: KGN)
Kogan is an online retailer selling a wide range of products from consumer electronics, to appliances, homewares, hardware, and toys. The company sells its own stock and provides for third party sellers via Kogan Marketplace. The company also owns and operates a suite of private label brands. The Kogan share price has surged since its March low of $4.16 with shares currently trading at $17.34.
The company grew gross sales by more than 100% in April and May with gross profit growing by more than 103% over the same period. Kogan is benefitting from the ongoing shift to ecommerce, which has been hastened by the onset of coronavirus.
Premier Investments Limited (ASX: PMV)
Premier Investments is the company behind popular brands Peter Alexander, Smiggle, Portmans, Just Jeans, Jay Jays, Jacque E, and Dotti. The company also holds a 28% stake in Breville Group Limited (ASX: BRG). The Premier Investments share price is up 82% from its March low but remains 23% below its February high.
Premier Investments closed stores during the first lockdown and took the hard line with landlords on rental payments. Pleasingly, during temporary store closures the retailer's online sales surged. Online sales for Peter Alexander during the store closure period were up 295%. Incredibly, during the week ended 2 May, the brand's online sales alone were up 18% on the previous years total sales across online and the 122 store network.
Adairs Ltd (ASX: ADH)
Adairs is an omni-channel home furnishings retailer operating in Australia and New Zealand. Its product range includes bed linen, towels, homewares, soft and children's furnishings, and some furniture. The Adairs share price has recovered strongly from the March downturn and is now close to reaching its pre-Covid-19 peak.
The retailer was forced to close stores during the first lockdown, but its online sales surged. Customers spending more time at home took the opportunity to upgrade home furnishings. Adairs reported a 92.6% increase in online sales in the 24 weeks to 14 June 2020. This led to a 27.4% increase in total sales for the period. Online furniture subsidiary Mocka saw sales growth of 52.1% over the same period.
Foolish takeaway
Observing your own spending patterns can help you identify trends that will impact ASX shares in both the short and long term. If you're a believer in the products or services produced by a certain company, you may want to consider investing. That way, you could stand to earn a portion of the money you spend on its products in the form of dividends.
