🦘 Retail Sales Give Economic Boost, Building Approvals Rebound, Dutton’s Divestiture Powers Split Liberal Party

G’day everyone!

Here’s what we’ve got in store for you today:

• Retail Sales Give Economic Boost

• Building Approvals Rebound

• Dutton’s Divestiture Powers Split Liberal Party

Let’s have a look at the market snapshot before jumping into the news:

Retail Resurgence: Savvy Shoppers Bolster Australia's Economy

Retail therapy went into overdrive in May, giving the Australian economy a much-needed lift.

The Australian Bureau of Statistics reported a 0.6% boost in retail turnover, fueled by deal-hunting consumers chasing early end-of-financial-year bargains.

Robert Ewing from ABS highlighted that despite this retail uptick, broader spending trends remained flat, with overall consumer spending showing a modest annual growth of just 1.5%.

To entice shoppers, retailers heavily relied on discounts and promotions, especially with consumers tightening their belts due to ongoing cost-of-living pressures.

Some retail categories shone brighter than others.

Clothing, footwear, and personal accessories led the charge with a solid 1.6% increase, bouncing back from previous declines.

Household goods also fared well, up by 1.1%, although department stores weren’t as fortunate, seeing a slight dip of 0.9%.

However, this economic cheer might come with a catch.

With the Reserve Bank eyeballing inflation risks, a possible rate hike looms, especially with the cash rate currently parked at 4.35%.

Analysts, like Tony Sycamore from IG, reckon there’s a 35% chance we might see a rate adjustment in August.

So, while shoppers are reveling in bargains, homeowners might need to brace for financial tweaks up ahead. Stay tuned!

Home Building Approvals Hit a High Note in May

Good news for Aussie home builders!

The Australian Bureau of Statistics (ABS) reported that new home approvals surged by 5.5% in May, bouncing back nicely after a 1.9% rise in April.

Particularly impressive were gains in WA and NSW, where new house approvals shot up by 8.4% and 5.9% respectively.

WA is catching up quickly, approving 1,504 new homes, nearly rivaling QLD's 1,841 despite having only half the population.

However, VIC rained on the parade with a 3.4% drop, though they still lead with 2,845 approvals.

Daniel Rossi from ABS noted that the rise was mainly driven by private sector dwellings (not houses) which jumped a whopping 16.3%.

Total dwelling approvals saw smaller, yet notable, increases: nearly 20% in WA, almost 9% in VIC, and 6.3% in QLD.

Despite the positive bumps, total dwelling approvals in the past year are well below the 240,000 needed annually to meet the National Cabinet’s target of 1.2 million new homes over five years.

The takeaway?

We're on the right track, but to meet housing demands, we'll need to tackle tax, planning, and regulatory hurdles.

Keep building, Australia - there's a lot of catching up to do!

Dutton’s Supermarket Shake-Up Sparks Internal Liberal Spat

Peter Dutton’s bold plan to shake up the supermarket scene with forced divestiture powers has stirred a pot of controversy within the Liberal Party, leaving some members feeling blindsided and uneasy.

The proposal, which aims to grant the ACCC powers to compel supermarkets to sell stores to encourage competition, has ignited a heated debate.

Critics within the party, including Alex Hawke and Maria Kovacic, argue that this move could introduce unnecessary red tape and lead to costly legal battles with little to show for it.

One Liberal MP described the announcement as feeling like an “ambush," suggesting Dutton may have sacrificed core Liberal values to appease the Nationals.

Shadow Treasurer Angus Taylor defends the plan, arguing it would mostly work as a deterrent, likening it to his previous work on gas regulation.

The idea is that the mere threat of court action would encourage supermarkets to play fair without the need for actual lawsuits.

While some are skeptical, citing the potential for failed sales and legal complications, there's optimism that breaking the supermarket duopoly could pave the way for competitors like Aldi to thrive.

The big question remains: Will there be enough interested buyers?

Interestingly, this push stops short of targeting other big industries like banks and airlines, despite some Nationals having their eyes on them.

The scope is currently limited to supermarkets and hardware stores, fueling a broader debate about the party's approach to big business.

As the ACCC gears up for a review and recommendations, the supermarket showdown is far from over.

Booktopia Books a Spot in Voluntary Administration

Booktopia, Australia's beloved online bookstore, has hit a rough chapter, sliding into voluntary administration after a scramble for emergency funds fell flat.

In a statement to the ASX, Booktopia announced it has appointed McGrathNicol's Keith Crawford, Matthew Caddy, and Damien Pasfield to manage the company's next steps.

The administrators are diving deep to figure out the best course of action, whether it’s selling the business or giving it a financial makeover.

For now, Booktopia's shares are on a timeout from trading.

Things looked shaky since last month when Booktopia paused ASX trading during a strategic review that began in February.

Part of this overhaul included letting go of 50 staff members and waving goodbye to CEO David Nenke after his year-long stint, all to save a cool $2.7 million.

Despite opening a $12 million customer fulfillment center in 2023, a pinch on discretionary spending saw sales plummet by 21%. Ouch.

First up on the administrators’ agenda: a creditors' meeting set for July 15.

The literary saga continues, so stay tuned as Booktopia attempts to turn the page on this tricky period.

You Made It!

If you’ve read all the way up to here, we just wanted to let you know that you’re an absolute legend!

Time to go to work and show off how clued up you are about what’s going on in the business world 💪

Keep an eye out for tomorrow's newsletter. Until then, we’d love to get your feedback below!