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Which Retailers Are Surviving The Digital Disruption?
BY ROGER MONTGOMERY - 27/02/2018 | VIEW MORE ARTICLES BY THE MONTGOMERY TEAM

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.



View More Articles By The Montgomery Team

Roger Montgomery is the Chief Investment Officer of Montgomery Investment Management, montinvest.com, and author of blog.rogermontgomery.com.

Roger's step-by-step guide to valuing the best stocks and buying them for less than they're worth, Value.able, is available exclusively at rogermontgomery.com. Skaffold is an online stock-picking application that rates ASX-listed stocks from A1 to C5. Watch a demo of Skaffold at www.skaffold.com.



 

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