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Speaker 1: Together do to see.

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Speaker 2: Alan San dickeya Fisher Funds is with us right now.

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Speaker 1: Hey, Sam, here there you day.

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Speaker 2: Hey, so we've got Black Friday sales already in full swing.

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Speaker 2: I want to know, I want to know what you're

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Speaker 2: reckon about Black Friday? Are you getting involved in this?

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Speaker 1: Not for me, but I mean it's really expanded.

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Speaker 3: I mean it started off as a one day sale

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Speaker 3: in the US the day after Thanksgiving. It has expanded

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Speaker 3: around the world, and China in particular is taken to

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Speaker 3: the next level. So they've got Singles Day, they've got

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Speaker 3: six one eight, which is a mid year sale. They've

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Speaker 3: got twelve twelve, which is a year in clean clearance sale,

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Speaker 3: they got a Chinese New Year sale, a Woman's Day sales, so.

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Speaker 1: They've gone a bit crazy with it.

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Speaker 3: But retail revenue on these sales days is usually many,

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Speaker 3: multiple times the size of.

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Speaker 1: A normal October shopping day for example.

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Speaker 2: For Black Friday to work, obviously, you need to have

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Speaker 2: consumers to actually have money. But do global consumers actually

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Speaker 2: have enough money this year?

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Speaker 1: Yeah? They do actually, So let's take retail sales. The

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Speaker 1: proxy is a start.

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Speaker 3: So US retail sales are growing three percent Europe's help

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Speaker 3: healthy too, But the standout is actually China. Again, retail

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Speaker 3: sales growth had been running around two percent earlier in

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Speaker 3: the year, but remember we spoke a few weeks ago

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Speaker 3: about that big stimulus package and the consumers responded, so

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Speaker 3: that retail sales in China now has grown about five percent,

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Speaker 3: so they had direct stimulus like tax cuts for example.

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Speaker 3: Back home here, the New Zealand consumers still shrinking slightly

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Speaker 3: as we know, but there is a forward looking indicator

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Speaker 3: people focus on, which is consumer confidence, and US and

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Speaker 3: Aussie consumer confidence as it as sixteen month high and

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Speaker 3: even New Zealand consumer confidence is picking up, so that's positive.

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Speaker 3: And the other really important thing is the consumer balance

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Speaker 3: sheet around the world, and particularly in a place like

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Speaker 3: the US, is actually a lot healthier than it's been

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Speaker 3: in many years. So take US household debt to GDP

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Speaker 3: for example, that's the lowest it's been in fifteen years.

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Speaker 3: So when we hear about stretched balance sheets around the world,

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Speaker 3: it's actually governments that have stretch balance sheets, not the consumer.

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Speaker 2: Interesting, now, does this I mean it's very competitive out

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Speaker 2: there for the retailers. Does this kind of thing benefit

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Speaker 2: the big players, make them get bigger.

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Speaker 1: It does, It really does.

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Speaker 3: So if you take take the US again, you know

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Speaker 3: players like Walmart, Amazon, Costco, So, Target, and Boots Walgreens.

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Speaker 3: They account for over a trillion dollars in sales, or

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Speaker 3: twenty five percent of US retail sales.

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Speaker 1: So four or five players are.

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Speaker 3: A quarter of total sales, and they all continue to

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Speaker 3: grow faster. Not so much Target, by the way, but Walmart, Amazon,

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Speaker 3: and Costco continue to grow faster than the overall system,

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Speaker 3: so they continue to take that market share.

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Speaker 2: What does this mean do you think for consumers?

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Speaker 1: Then?

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Speaker 3: I think it's it's on the face of it's good news.

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Speaker 1: So why are these guys growing faster.

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Speaker 3: They're using their economies of scale to negotiate with suppliers,

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Speaker 3: so they get cheaper costs and they pass that on

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Speaker 3: to consumers in the form of cheaper prices. So Costco,

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Speaker 3: which has got its west Auckland store, is a great example.

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Speaker 3: So their mantra when you go and meet management, or

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Speaker 3: they go into any strategy meeting or they have any

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Speaker 3: board meetings, they never talk about how they can take

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Speaker 3: more margin out of us as consumers or more profit.

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Speaker 3: They always talk about how they can drive lower prices

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Speaker 3: for us. So because of that, and that's actually called

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Speaker 3: scale economy shared by the way, because of that, every

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Speaker 3: time they get a little bit bigger, they recycle that

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Speaker 3: those profits into lower prices for us, which means they

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Speaker 3: garner more of our wallet. And that's why the west

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Speaker 3: Aukland store is booming. So that's good news, right, So

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Speaker 3: that these big guys are very efficient at driving down

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Speaker 3: the price.

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Speaker 1: Of goods, then we should benefit as consumers.

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Speaker 2: Yeah too, right, what about investors? I mean, does this

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Speaker 2: mean you need to back the big guys?

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Speaker 1: I think so. So a few things to bear in

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Speaker 1: mind there.

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Speaker 3: So Black Friday itself can give us a early hint

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Speaker 3: on how bullish we're all feeling around the world as

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Speaker 3: consumers heading into Christmas. That keep Christmas period. This is

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Speaker 3: sort of a one day sneak peek of that. The

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Speaker 3: second thing is these big retailers are consolidating market share

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Speaker 3: and the smaller retailers are struggling. So I guess when

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Speaker 3: you're thinking about that, there's a lot of very cheap

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Speaker 3: looking from a a price to Earninge's basis small retailers

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Speaker 3: around the world. But just be careful that the big

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Speaker 3: guys continue to do well. And you see that in

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Speaker 3: this year prices so Walmarts up seventy five percent, year

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Speaker 3: to day cost goes up another fifty percent, and as

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Speaker 3: it Amazon's up forty percent.

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Speaker 1: So it does seem like the bigger getting bigger.

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Speaker 2: Interesting. Hey Sam, thank you so much as always, talk

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Speaker 2: to you again soon that Sam Dickie Official refunds.

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