31/05/2024 09:18

Should we reconsider the Supermarkets as the ASX “wobbles”?

The Consumer Staples Sector has been very weak on the ASX, significantly underperforming the US equivalent. Unfortunately, there are many “like for like” examples of local stocks delivering dismal returns compared to their US peers. There are a number of obvious reasons behind the recent pullback in the local sector, including wage pressure and a Senate inquiry into supermarket competition and prices. The final report is due to be provided no later than 28 February 2025, i.e. plenty of uncertainty through 2024.  We love an inquiry in Australia; we cannot imagine Trump et al. starting many in the US, which by definition helps corporate America.

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02/02/2024 09:11

If Metcash raises cash, will it provide opportunities?

The Australian Consumer Staples sector has struggled over recent years, but as MM looks to position portfolios more defensively, it's been on our radar of late, i.e. people have to eat. With interest rates set to fall through 2024/5, inflation under control and supply chain issues in the rearview mirror, the outlook has improved for the sector. The peak cost of living has passed, with spending growth on the horizon, helped by solid immigration, with supermarkets  likely to be a key beneficiary.

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12/09/2023 09:27

Consumer Staples Sector

Arguably the biggest surprise to the market through August came from consumer stocks. Into reporting season investors had been “hiding” in the perceived safety of the defensively regarded staples, assuming that the discretionary stocks would struggle under the increasing weight of cost-of-living pressures, including higher mortgage rates.

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