With inflation at multi-year highs, the cost of essentials like food and fuel are climbing with consumers spending discretionary funds towards services, like travel and experiences that were at a stand-still during the pandemic.
While the Russian invasion, extended lockdowns in China, and soaring gas prices exacerbated the macro picture, retailers have warned about the effects of higher input costs, with supermarket giants Coles (ASX:COL), and Woolworths (ASX:WOW) flagging to consumers that their weekly spend is going to rise. While travel stocks such as Qantas (ASX:QAN) have flagged that jet fuel is set to weigh on the price to fly.
Consumers haven’t forgotten about the strained supply chain with JB Hi-Fi (ASX:JBH) warning investors about delays and inventory availability lasting into the last quarter of the financial year.
The electronics retail giant posted a strong update, reporting total sales growth of 11.9 per cent over the year, underpinned by an 11.1 per cent jump in comparable store sales growth year on year. Across the Tasman, the New Zealand JB Hi-Fi business reported a 4.8 per cent increase in sales during the third quarter, while the Good Guys business posted a 5.5 per cent beat on quarterly sales growth.
However investors sold on the news as the uncertainty continues to loom with the company withholding any financial year 2022 sales and earnings guidance, citing the ongoing disruption to stock availability and operations arising from Covid-19 amid the global macro picture. As interest rates move higher, investors appear to be focusing on company guidance over backward looking performance for any colour on the outlook ahead.
Shares in JB Hi-Fi (ASX:JBH) closed 4.8 per cent lower to $49.73.