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Which retailers are surviving the digital disruption?

27022018 retail

Which retailers are surviving the digital disruption?

Digital disruption is hitting the retail sector harder than most. But not all retailers have been affected to the same extent. Recent research by Citi sheds light on the winners and losers this latest reporting season.

With the bulk of companies, by market capitalization, now having reported their half year results, our friends at Citi have collated the publicly announced information by some members of the retail sector.

Ranked from strongest like-for-like sales growth to weakest, the following table reveals that Bunnings and JB Hi-Fi remain star performers while fashion appears to be struggling.

Importantly, and despite the majority of trading updates revealing growth momentum abating, gross margins are under some pressure, thanks to competition-induced discounting.

Screen Shot 2018-02-26 at 1.29.36 pm

Source: Company announcements and Citi.

As research fellow in the QUT Chair in Digital Economy, Paula Dootson wrote for the ABC, “Today, I cannot say “Google, order more milk, please” and have an Australian retailer deliver it to my fridge. Nor can I go one step further and have my fridge order my milk without me knowing about it.”

But that kind of disruption is already in its way ensuring that the retail sector will have one of the highest degrees of digital disruption of all industries by 2020.

The retail sector could be a minefield for investors, so be sure to seek and take personal financial advice.

Digital disruption is hitting the retail sector harder than most. But not all retailers have been affected to the same extent. Recent research by Citi sheds light on the winners and losers this latest reporting season. Click To Tweet

Roger is the Founder and Chief Investment Officer of Montgomery Investment Management. Roger brings more than two decades of investment and financial market experience, knowledge and relationships to bear in his role as Chief Investment Officer. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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