Retailers look to renovations to bolster weak housing market
The AFR reported that homewares, hardware, and electronics retailers are counting on a pick-up in home renovations as the downturn in housing sales and prices starts to bite. Like-for-like (LFL) sales growth at retailers ranging from Beacon Lighting and Nick Scali to JB Hi-Fi, Harvey Norman and Bunnings came off the boil in the fourth quarter of the 2018 financial year and analysts expect conditions to become even more challenging in 2019 as the housing downturn gathers pace and consumers become more cautious. Sales of goods such as lighting, sofas, carpet, curtains, paint and appliances are strongly tied to house prices, housing churn and auction clearance rates. A Citigroup analyst said the current cycle was increasingly resembling that in 2011/2012, when a slowing housing market combined with elevated price competition drove large earnings downgrades.