In retail, the winning combination is increasing comparable sales together with the opening of new stores. This combination increases total sales and the valuation of the stock. This is more typical of a newer business that’s growing strongly than a mature business that has saturated its market. When it comes to a mature business with little growth prospects, the strategic options can be risky and usually involve a move offshore to find growth. This has been a hit or miss for Australian companies. Companies such as Domino’s Pizza Enterprises Ltd (DMP), Premier Investments Limited and (PMV) have done it well. Companies such as Wesfarmers Ltd (WES)/Bunnings have seen failure when it comes to overseas expansion.

One stock that’s on a win

The move for shoppers away from bricks and mortar retailers to online platforms has introduced competitive pressures, margin compression and the need to innovate and adjust. This means that shopping centres have tried to evolve utilising the smaller footprint that many retailers are now moving towards.

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