Retailers Reap Benefits from Government Handouts as Sales Boom

Australian retailers have experienced a sudden surge in sales thanks to the government's $600-a-child cheques distributed to 2 million families, with some stocks increasing by as much as 14%. The handouts, along with imminent tax cuts and a further payment of $3000 for families with new babies, have triggered a consumer spending spree.

Key Takeaways:

• Pick 'n Pay's managing director, Aubrey Zelinsky, reported a significant increase in sales following the government cheques, describing it as an "instant" result.
• Coles Myer jumped 14 cents to $8.85, with other retailers such as Just Jeans and Super Cheap Auto also experiencing significant gains.
• The National Australia Bank suggested the latest consumer spree may have been triggered by the government handouts, tax cuts, and a further payment for families with new babies.
• Clothing retailers like Country Road enjoyed good trading in June, but it was difficult to determine how much was attributable to the government largesse.
• The $600-a-child handouts and the certainty of impending tax cuts may have contributed to the busiest week for clearing winter season stocks.
• Country Road's net profit is expected to be in line with last year's $2.4 million.

Statistics:

• $600 - the amount of government cheques distributed to 2 million families.
• 14 cents - the increase in Coles Myer's share price.
• 2.4 million - Country Road's net profit for the previous year.
• 10 cents - the increase in Just Jeans' share price.
• 4 cents - the increase in Super Cheap Auto's share price.
• 2 million - the number of families receiving government cheques.
• $8.85 - Coles Myer's new share price.

Sources:

• Bloomberg News
• National Australia BankReuters