Afterpay, Zip propping up sluggish retail sales

Afterpay, Zip propping up sluggish retail sales

Buy-now, pay-later players are propping up the weak retail sector, with the latest estimate from UBS suggesting the payment channel makes up more than half of online sales for some retailers.

The latest data from the Australian Bureau of Statistics shows retail sales fell 0.1 per cent in April 2019, seasonally adjusted, following a 0.3 per cent rise in March 2019.

Analysts were expecting a 0.2 per cent gain over the month.

Leading the decline was spending on clothing, footwear and personal accessories, which fell by 1.2 per cent over the month. Spending on household goods and cafe, restaurant and takeaway food fell by 0.9 and 0.7 per cent respectively.

Department store spending, other retailing and food retailing all went up over the month.
Westpac analyst Matthew Hassan said the “wealth effect spillovers” from a housing market correction led by the price falls in Sydney and Melbourne were weighing on sales.
“Overall the April retail update is clearly on the soft side, making a weak start to the June quarter and with some worrying signs that wealth effect drags may be intensifying,” he said.
In a note to clients, UBS analysts estimated that in the six months to December 2018, listed buy-now, pay-later providers Afterpay and Zip accounted for about 16 per cent of the growth in discretionary retail spending. This is up from an estimated 14 per cent in the six months to July 2018.

To read more, please click on the link below…

Source: Afterpay, Zip propping up sluggish retail sales