Biggest retail stories - 2025 Recap

Before we start today's podcast, we want to acknowledge the horrific terrorist attack that took place in Bondai yesterday. We're absolutely devastated to hear the news. Today's recap podcast pales in significance to the events that took place yesterday. We're sending our thoughts to all the victims, their families, the Sydney Jewish community and everybody affected by this senseless attack.

This is what the flux.

I'm Brett and I'm Justin and it's Monday, the fifteenth of December. We are very excited to be doing our very first recap episode for twenty twenty five now be Man. As you know, retail is one of the lifebloods of the Australian economy, with employees, millions of ossies. It fills our shopping centers and it gives us a real time read on how confident people are with their money, and twenty twenty five gave us a heap to talk about.

Three generous stories today, Juzzy boys, let's do it for our first. Chemist Warehouse officially launched on the ASX yesterday as its mega merger with Sigma Healthcare went live.

Now it's time for investing. Why pay more for the share price? So tell me what'll be man.

Well, juzzy boy. We all know Chemists Warehouse as the pharmacy with ales tighter than compression socks.

And the jingle more catchy than hot Potato by the Wiggle.

But since its first store in two thousand, Chemist Warehouse has grown to more than six hundred.

Stores and be Man or Chemists Warehouse announced its plans to merge with Sigma Healthcare back in December twenty twenty three. Yesterday was their hard launch.

And Chemists Warehouse sprinted from a private company to the nineteenth largest on the as HOUSE.

We're talking to company worth around thirty two billion dollars.

Now, for some perspective here, Chemists Warehouse is valued more than Colds and more than double of Quantus and be Man. With so few big name companies listing on the ACEX lately, there has been a heap of buyers that have been sweeping in yep, and naturally a lot of sellers getting out, in particular Man Chemist's Warehouse franchisees, who collectively were holding more than a third of the company pre IPO. And unlike the Chemists ware House founders, these franchisees shares those were.

Unescrowed, so they're making a rain at buster the nasal spray.

So what is the key learning here?

When a company goes public or mergers with another company, shareholders are often required to hold onto their shares for a set period of time.

Now. This is called escro and it's designed to prevent a flood of shares hitting the market all.

At once, which could crash the share price.

For example, Jazzy Boy Chemist Warehouse co founders own forty eight point three percent of the merged company.

So if they were to sell all their shares on day one, it would be way more supply of shares than demands.

Causing the share price to decline big time, not to mention the fact that new investors would be less likely to invest if they knew the founders were out on day one.

On the other hand, THO. B. Man Chemist's Warehouse franchisees, who earned about thirty seven and a half percent of the company aren't under escrow terms.

And with so much interest in chemists ware house stock, many franchisees have already jumped at the chance to cash in. And while the sales of franchise shares has already begun, we could see even more selling in the coming week. For our second story, the Reject Shop is planning to rebrand its stores into Dollarama stores as it pushes towards becoming a super low priced retailer.

Wasn't it already kind of low priced? Hallou can you do?

Yeah?

Tell me what's going on here? So?

The Reject Shop started in Melbourne in nineteen eighty one as a retailer that sold discontinued lines of products and factory rejects, but over the years.

It's become a lot more than just rejects.

It sells everything from snacks to party hats, to health foods and cleaning supplies.

But beman from late twenty thirteen to early twenty twenty five, the Reject Shop's share price had plummeted more than eighty three percent.

So in July this year, Dollarama announced his acquisition of the Reject Shop for two hundred and fifty nine million dollars.

And be man, if you're wondering who Dollarama is, that is the nearly fifty eight billion dollar Canadian discounting behavior which has a nothing of a five dollar promise.

Yep, it literally has nothing in store over five bucks.

And now the Reject Shop's new corporate overlord has revealed its plans for a full scale transformation of the Region shop. The Reject Shop's iconic name will eventually disappear and it will be replaced by Dollarama branding and the Dollarma crew plant to double the Australian store count to seven hundred by twenty thirty four.

They're also planning to leverage dollar Arma's massive supply chain to flight Australian stores with ultra cheap products.

And they Man, they're certainly trying to disrupt the market with some price leadership.

So what is the key learning here?

Price leadership is most commonly when a company uses lower pricing to reshape an industry.

It forces competitors to either follow suit or risk losing market share.

In Australia, we've seen Audi pull out the price leadership against Coles and Rullies over the past two decades.

And of course they've seen Kmart do this to Big W and ironically the reject shop too.

But now the region shop with its Dollarama Mite is pulling out the unu reverse cards Kmart.

The danger for incumbents is that they can't always match those prices without crushing their own margins. The goal for Dollarma would be to push out weaker players from the market.

We know the Big W is already struggling after it's thirty five million dollar loss for the last financial year.

So this price leadership is about res setting customer expectations for what cheap actually looks like.

The real discount war has only just begun. Your move next, km Us.

For our third and final story, Coles has seen it chares jump eight percent after a big push in its home brand products.

The little red quote going hard and performing well, so tell me more so.

Cole's Group is the company that owns major Rossie supermarket Giant Coals, as well.

As one thousand liquor stores across the country under the liquor Land brand.

But joseiboit. We know that over the past twelve months, Coals has made a big push to chase market leader all leez.

Yep Coles is double down on its downdown campaigns as well as its private label brand, and it was good news for the big red.

Coals Group's sales lifted one point seven percent to forty four point five billion, but be man.

It's group net profit actually dipped by three and a half percent.

Okay, what were the main offenders?

Well, the earnings from liquorland fell.

And tobacco sales fell thirty percent because of the black market tobacco trade.

Interesting the sin categories.

But Josie Boit hold up right there because on a normalized basis, Coals Group sales were actually up three point six percent and.

It's profits up two point four percent.

So what is the key learning here?

Not all financial years are created equal, especially in supermarkets where some years stretch to fifty three weeks.

Yep. That is why Coles also reported their normalized financial results to investors, and normalized results are well. Normalized figures strip out unusual factors like an extra trading week to give a clear review of a company's performance.

And this matters for retailers like Coals more than an industry like financial services or banking.

And why is that?

Because retailers like supermarkets report results in weekly periods, so an extra week means an extra seven days of supermarket sales. It's basically like coals playing an extra round of footy in the season.

YEP, the last time Coles reported on a fifty three week basis was actually FO twenty four, but before.

That it was f OX nineteen, so it doesn't happen too often.

That is why analysts look at normalized numbers, which strip out that extra week to show true performance the coals.

Those numbers were strong enough to impress it the checkout and the stock.

Market, and clearly it impressed investors enough because coal shares jumped.

A only all years had fifty three weeks for goals. That's it for today. Botsdown our first recap episode on the Biggest Australian retail stories of twenty twenty five. Join us on Wednesday for a recap on the biggest tech stories of twenty twenty five. Thanks for listening and we'll see you on Wednesday.