This morning’s big profit result came from global shopping centre giant Westfield Group, which has disappointed investors by posting a $457.8 million loss for the 2009 calendar year.
That wasn’t unexpected, but what apparently slightly disappointed investors is the fact that the company didn’t produce much in the way of guidance for the 2010 years, and that its US business is performing a little worse than expected.
However, there could be some exciting times ahead for Frank Lowy’s company, now really run on a day-to-day basis by his sons Peter and Stephen. The company has a good amount of cash sitting around and some acquisition targets on the horizon.
The release of the Westfield results also gives an opportunity to get an insight into the mind of the Australian consumer, thanks to the retail sales data the company gathers from its centres.
The biggest rise in the last three months and in the last year came, surprisingly enough, in the cinema category, which climbed an impressive 18.7% in the final quarter of 2009.
Food catering – that is, the cafes, restaurants and take away places in Westfield centres – were next best, with sales up 2.8%. Leisure and fashion came in at 2.7% and 2.6% respectively.
On the flip side, the really weak category was homewares, where sales dropped 6.6% in the final quarter of 2009. Supermarket and department stores were flat, while the “general retail” sector was down 0.2%.
Thee figures suggest that the popular theory that consumers were cocooning at home seems to have run its course, judging from the big drop in homewares sales. To underline this, households do appear prepared to venture out for a trip to the movies or for lunch at the local mall.
But while fashion and footwear is holding up quite well, the growth rates have slowed markedly since the start of 2009. The stimulus is well and truly over and retailers are being forced to adjust.
Caution, caution, caution. That’s the message from this limited consumer snapshot. Their moods have improved to the point that they feel confident enough to hit the cinema, but businesses are going to need to work hard to wrestle the cash out of customers’ hands.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
