Events
The National Bureau of statistics released the latest retail data of social consumer goods. In March 2022, the total retail sales of social consumer goods was 3.42 trillion yuan, a year-on-year decrease of 3.5% in nominal terms. Among them, the retail sales of consumer goods per unit above the quota was 1.36 trillion yuan, a year-on-year decrease of 1.4%; The retail sales of consumer goods other than automobiles were 3.06 trillion yuan, a year-on-year decrease of 3.0%.
In the first quarter of 2022, the total retail sales of social consumer goods was 10.87 trillion yuan, a year-on-year nominal increase of 3.3%, and the actual year-on-year increase of 1.3% after deducting price factors; The retail sales of consumer goods other than automobiles were 9.79 trillion yuan, a year-on-year increase of 3.6%.
Analysis and judgment
The covid-19 pneumonia epidemic at the beginning of the 20th century led to a trend of high growth rate in the first year and low growth rate in the second year, and the two-year average speed gradually moved closer to the previous range; The growth rate in the first two months of the 22nd year is the same as that before the epidemic (2019), but if our early judgment is consistent, the epidemic in many places in March has repeatedly dragged down the overall consumption. Among them, the cumulative retail sales in the first quarter increased by about 343.8 billion yuan compared with the same period of the previous year, and the growth rate narrowed compared with the previous month. Before the outbreak (taking the 10-year range from 2010 to 2019 as a reference), the year-on-year scale in the first quarter increased by about 680 billion yuan, and the performance of this year was significantly lower than that in previous periods; In March, the scale of a single month decreased by about 125.1 billion yuan compared with the same period of the previous year, which is a negative growth again after 20 years. Before the outbreak, the scale of a single month increased by about 224 billion yuan year-on-year, and the specific increase fluctuated in the range of 130290 billion yuan. It can also be seen that the downward trend of consumption in the first quarter was mainly concentrated in March.
According to the statistics of the National Health Commission, recently (as of April 18, 2022), there have been more than 28000 local confirmed cases and more than 280000 asymptomatic infections. Since March 12, the number of new cases in Japan alone has continuously exceeded 1000, and the number of new cases has exceeded 3000 on March 14 and April 15; From a regional perspective, Jilin Province (Jilin, Changchun), Shanghai, Guangdong Province (Shenzhen, Dongguan, Guangzhou) and other places are more serious. Considering that some cities follow the instructions of epidemic prevention and control and gradually upgrade the management and control of offline stores that may gather, large-scale home office, closed management and other situations occur in some areas (for example, Shenzhen implemented preventive closure from March 14 to 21, and Shanghai gradually implemented closure from March 28), which may have an impact on local retail, catering and other business forms in the short term, including supermarkets As a channel for purchasing residents’ daily necessities, online platforms can not be ignored for the stability of people’s livelihood.
In addition, from the perspective of holidays, March is the only month that works normally and does not include festivals and holidays in the first half of the year, so there are few opportunities for consumption and leisure; On the one hand, the Qingming Festival in early April is still greatly affected by the epidemic, and the performance of travel, consumption and other activities all over the country is lower than expected. At the same time, the Qingming Festival has the traditional attribute of returning home for sacrifice, and its own preference for entertainment is weaker than other holidays. Therefore, the overall performance is weaker than that of new year’s day and Spring Festival at the beginning of the year. The upcoming May Day holiday (April 30 – May 4) will last longer than Qingming. At that time, the negative impact of the epidemic is expected to weaken slowly, which will increase consumption opportunities and further increase the overall consumer sentiment. Therefore, we maintain that the growth rate of the holiday retail market throughout the year will show signs of stabilizing and improving.
The current consumer market environment and policy environment are relatively positive and optimistic. With the further promotion of China’s epidemic control effect and vaccine popularization, China’s economy is gradually returning to the early growth track, residents’ consumption confidence and the vitality of China’s consumer market are steadily restored, and the social consumption growth rate will further approach the pre epidemic level in 2022. In order to reasonably guide the expectation of the consumer market, combined with the 2025 development plan of China’s consumer market in the “14th five year plan” business development plan of the Ministry of Commerce, we conservatively predict that the year-on-year growth rate of social consumption in 2022 will be about 4.5% – 5.5%.
Supermarket channel related necessities: from the perspective of growth rate, grain, oil, food and beverage achieved double-digit growth, and further increased month on month. From the perspective of absolute value scale, grain, oil, food, beverage, tobacco and alcohol have increased in scale compared with the same period in 2019, 2020 and 2021. Influenced by factors such as pre purchase and hoarding at the end of last year and Spring Festival and other holidays, the scale of daily necessities has shrunk slightly year-on-year in 2021, but it is still significantly higher than that in the previous two years. Among them, grain, oil and food were driven by the positive rise of CPI. In March, CPI rose by 1.5%, with an increase of 0.6 percentage points over the previous month. Among them, food prices fell by 1.5%, with a decrease of 2.4 percentage points over the previous month. Affected by the high base in the same period of last year, pork prices fell by 41.4%, but the decline narrowed by 1.1 percentage points over the previous month. The price of fresh vegetables increased by 17.2% from a decrease of 0.1% last month, and the prices of fresh fruits and aquatic products increased by 4.3% and 4.2% respectively. Combined with the above analysis of the epidemic situation, we believe that the growth performance of mandatory categories will be stronger in the short term, and the performance of corresponding mandatory consumption channels such as supermarkets is worth looking forward to.
Optional items related to department store channels: by the end of 2021, the monthly retail sales of clothing, shoes and hats had been lower than that of the same period in 2020 for 5 consecutive months (August December), and some months were even lower than that of the same period in 2019. The scale shrank. At the beginning of this year, there was a positive growth rate. The purchase of new clothes during the Spring Festival and the successive listing of spring clothes may have effectively boosted the growth; However, with the tightening of epidemic control measures such as offline stores, it is difficult to reflect the positive factors of demand such as women’s Day promotion and spring season change. The sales scale shrank significantly again in March, and its monthly performance reached the lowest level in 15 years (only considering the single month in March). Similar to the performance in a single month, cosmetics, gold, silver and jewelry and other categories were also limited by the consumption scenarios of alternative channels this month, showing negative growth.
Durable goods related to professional chain channels: household appliances and furniture related to the real estate cycle have similar growth performance in this period. Among them, furniture continued the negative growth performance in the early stage, which was more affected by real estate; Combined with the cumulative year-on-year growth of housing construction area, completed area and sales area, the growth rate of retail sales of furniture shows a similar trend. Household appliances continued the growth trend in the second half of 21 years, and the overall performance was stable; However, the monthly performance is similar to that of other optional products, and it is also expected to be affected by the obstruction of offline operation. According to the current research and judgment of the Bureau of statistics on the real estate industry, “as soon as possible, the current real estate sales are still declining. With the moderate liberalization of purchase and sale restrictions in many places and the reduction of the threshold for the use of provident fund, the decline of real estate sales in some areas is narrowing; with the improvement of the long-term mechanism of real estate and actively meeting the demand for real estate housing, the downward trend of national real estate sales will be alleviated”. Therefore, we believe that the long-term performance of related industries is worth looking forward to.
Investment advice
The 20-year epidemic had a serious impact on the retail industry, and the overall retail market was divided; The recovery performance corresponding to the beginning of 21 years also showed differentiation; In the first two months of 22 years, there was a trend that all categories returned to the normal growth range, but the repeated epidemic since March once again brought a certain degree of negative impact. From the perspective of categories, the anti cyclical advantages of essential consumer goods appear. Among them, the growth rate of basic domestic consumption represented by grain, oil and food, beverages and daily necessities is relatively stable and highly resilient; In addition, the upgrading consumption includes the consumption of non durable goods (cosmetics) in offline channels, as well as the categories in offline consumption scenes such as business banquets and weddings (catering, tobacco and alcohol, gold and jewelry, etc.) have a better recovery performance. Among them, the contact aggregation industry (catering, offline options, etc.) may be greatly affected by the epidemic in the short term, but the long-term general trend of consumption upgrading and improvement will not change.
In terms of scale and volume, the retail sales of consumer goods above the quota increased by 5.4% in the first quarter, slightly better than the overall trend of social zero, which reflects that companies with relatively large scale and volume have stronger risk prevention and pressure resistance during the epidemic, and have obvious advantages in maintaining business; However, the range of comparative advantage has narrowed. In the long run, if the impact of the epidemic is gradually weakened, with the effective implementation of national policies for the high-quality development of small and medium-sized enterprises, or the strong growth of units below the limit, the business flexibility of enterprises below the limit is higher.
In addition, the epidemic period will have a far-reaching impact on consumers’ consumption habits and consumption channels, and frequent online promotions will further improve channel performance. We maintain that the general trend of increasing online share year by year will not change. At the end of the 21st year, the Ministry of Commerce, the central network information office and the development and Reform Commission issued the “14th five year plan” for e-commerce development, which defined the three orientations of focusing on e-commerce, connecting Wuxi Online Offline Communication Information Technology Co.Ltd(300959) , connecting supply and demand, and connecting China’s foreign markets, giving e-commerce a new mission to promote “high-quality development of digital economy” and help “achieve common prosperity”.
According to the retail format of offline channels, the retail sales of supermarkets, convenience stores, specialty stores and specialty stores in retail units above the quota in the first quarter increased by 3.2%, 10.1%, 6.6% and 1.0% respectively year-on-year, and the retail sales of department stores decreased by 3.3% year-on-year. The development of the above business types is also basically consistent with our early judgment. As a relatively emerging and sunrise retail channel, convenience stores are in line with the trend of convenient and rapid consumption, and can also meet the basic and immediate consumer demand of consumers, so the growth rate is high; As a traditional must choose consumption channel, supermarkets have stronger growth toughness and more stable growth performance; As a representative of offline optional channels, department stores are more affected by the impact of the epidemic, and the cumulative negative growth in the quarter also matches the shrinking trend of retail sales of relevant categories analyzed above.
From the perspective of policy, the Ministry of Commerce studied and prepared and triggered the “14th five year plan” for business development in early July of 21, which puts forward expected indicators for consumption development from 2021 to 2025. The total social consumption is expected to be 50 trillion in 2025, with an average annual compound growth rate of about 5%; The national online retail sales will reach 17 trillion yuan, with an average annual compound growth rate of about 7.6%. The plan will have a guiding impact on the recent development of commodity and service consumption. In March 22, the government work report proposed to promote the sustained recovery of consumption. We will increase residents’ income through multiple channels, improve the income distribution system and enhance consumption capacity. Promote the deep integration of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) consumption, promote the recovery of life service consumption, and develop new consumption formats and models. Improve the quality of products and services, strengthen the protection of consumers’ rights and interests, strive to meet the needs of the masses and enhance the willingness to consume. In addition, the prime minister fully affirmed the role of consumption vouchers in answering reporters’ questions, mentioned that “issuing consumption vouchers may directly stimulate consumption”, and stressed the importance of restoring offline consumption. On April 13, the national Standing Committee deployed policies and measures to promote consumption to help stabilize the economic fundamentals and ensure the improvement of people’s livelihood. The meeting made it clear that consumption has a lasting driving force for the economy and is related to ensuring and improving people’s livelihood; Efforts should be made to stabilize current consumption and take comprehensive measures to release consumption potential: first, we should deal with the impact of the epidemic and promote the recovery and development of consumption; Second, we should promote new consumption; Third, we should expand consumption in key areas; Fourth, we should tap the consumption potential of counties and townships; Fifth, we should strengthen security.
In the long run, the growth rate of social consumption in a single month will return to the average level in the early stage of the epidemic through the pendulum track, and the scale of the consumer market will continue to expand; At present, there may be repeated epidemics everywhere, and short-term fluctuations will not affect the general trend of stable development. Therefore, we believe that we still need to maintain a cautious and optimistic attitude and calmly judge the consumption growth logic behind the data. In this context, we will continue to maintain the two major themes of “digitalization” in the annual strategy of 2021 and “specialization and innovation” in the annual strategy of 2022, and focus on recommending manufacturers and channel brands with high business certainty and certain brand influence and certain ability of price guarantee and favorable price in combination with the requirements of keeping the lead and seeking progress in stability; In addition, considering the repeated epidemic in many places, we believe that we still need to pay attention to investment opportunities in basic livelihood industries. The recommendations focus on the Department Store ( Rainbow Digital Commercial Co.Ltd(002419) . SZ ( Rainbow Digital Commercial Co.Ltd(002419) . SZ) ( Rainbow Digital Commercial Co.Ltd(002419) . SZ), the Wangfujing Group Co.Ltd(600859) ( Proya Cosmetics Co.Ltd(603605) . SH), Yunnan Botanee Bio-Technology Group Co.Ltd(300957) ( Yunnan Botanee Bio-Technology Group Co.Ltd(300957) . SZ), Hangzhou Coco Healthcare Products Co.Ltd(301009) ( Hangzhou Coco Healthcare Products Co.Ltd(301009) . SZ), Hangzhou Haoyue Personal Care Co.Ltd(605009) ( Hangzhou Haoyue Personal Care Co.Ltd(605009) . SH), Winner Medical Co.Ltd(300888) ( Winner Medical Co.Ltd(300888) . SZ), Chongqing Baiya Sanitary Products Co.Ltd(003006) ( Chongqing Baiya Sanitary Products Co.Ltd(003006) . SZ).
Risk tips
The overseas epidemic continues to exceed the expected risk and the risk of continuous lack of consumer confidence.
