The National Accounts for the March 2026 quarter paint a picture of slower household income growth, but consistent spending trends. Income growth of 5% matched broader consumer spending and retail spending trends. The consumer’s initial response to higher interest rates and petrol prices has been to save a bit less. Given savings are a healthy 6%-7% of income, we expect savings to delay the downturn in retail and see a trough in retail sales growth at close to 3% in the December 2026 quarter.

The RBNZ remains on hold while the RBA has already raised rates three times this year. New Zealand retail sales began recovering in the September quarter 2025 and the income backdrop remains good for NZ consumers despite the risk of higher inflation and interest rates. We forecast New Zealand retail sales growth to hold at 4.2% over FY27e, with 3.6% growth in at-home food & liquor and 4.6% in non-food retail. The retail sales cycle in New Zealand may be more uncertain in FY27e, but the long-dated impact of rate cuts is still a tailwind, along with improving net migration and employment growth. Key retailers that have earnings upside in NZ are Ampol, Woolworths and Harvey Norman. To a lesser extent, JB Hi-Fi and Nick Scali will see upside to earnings but both have a very small store network.

Endeavour’s strategy unveil focused very much on retail fundamentals and lacked quantifiable detail.  The emphasis on sales growth is sensible given Endeavour Retail has lost 5% of market share over five years. There is upside in selling data to suppliers and better buying margins too. The $300 million cost savings will be partly offset by cost inflation. Management incentives attached to the strategy will be crucial. Previous iterations focus on sales, EBIT and working capital, along with ROFE and EPS. We expect the same focus going forward. We forecast capex to hover near $500 million as more is spent on hotels, which is consistent with a lower dividend payout ratio.

Australian retail sales grew 4.7% in April 2026. Given the timing of Easter, a combined March-April read is more relevant, which shows growth of 5.2%. This is still above long-term trends, and stronger in non-food and dining out. Despite rate hikes and a petrol price spike, consumers are still happy to spend.

GyG’s decision to exit the US is sooner than expected but a logical step given weak sales productivity in that market. We lift our EPS forecasts by 4% in FY26e and 37% in FY27e. As an Australian store rollout and margin expansion proposition, GyG’s prospects look good. The company’s affirmation of $85 million in Australian EBITDA suggests an EBITDA margin of 6.2% for FY26e. This is a rise of 60bp and we see 40-60bp annual margin expansion over the next three years.

Endeavour Group will hold a strategy day on 27 May 2026. While a good opportunity to hear about its focus and meet new management, we expect the strategic pillars to be about improving its price position in Dan Murphy’s and cutting costs, both largely known topics. We wonder about the future of Pinnacle Drinks and see upside from a shift in range towards RTDs. Hotels refurbishments will be a feature with a higher frequency needed. We think the strategy day is unlikely to reveal much new, and puts the focus on a) liquor industry demand growth and b) the execution of its strategy.

Bapcor has provided yet another soft trading update, which results in lower EBITDA for FY27e. We reduce our EBITDA forecasts by 7%-10% over the next three years. Bapcor had shown signs of sales stabilisation but industry-wide delays in vehicle servicing have led to weaker sales from April 2026 and will continue until fuel prices subside.

dusk’s AfterGlow concept, follow the Glow and Glow 2.0 store concept. AfterGlow has been rolled out in six of the ~150 stores and accounts for 4% of the store network. dusk has reported average transaction value and units per customer for AfterGlow up double digits. dusk is also working on an AfterGlow “lite” refurbishment which has a lower capex outlay and takes just three days to fit which could accelerate the rollout.

Breville has navigated a turbulent six years given a COVID-19 boom in demand and bust along with the introduction of China tariffs by the US. We expect Breville to sustain close to 10% constant FX sales and EBIT growth over the next two years. The demand backdrop in the US remains strong and globally the coffee machine market has significant upside in household penetration. Even though competition in coffee machines is heating up, Breville’s premium position affords it some protection. We also see medium-term sales support from additional markets like China and the middle east.

Metcash’s FY26e trading update highlights slightly stronger second-half sales trends and better margin results in both Food and Liquor segments. While Hardware sales growth was stronger, margins declined. Metcash is managing the soft sales backdrop by cutting costs and tobacco headwinds should ease substantially in FY27e. The primary risks we see are the magnitude of the margin recovery in Hardware and the increasing likelihood of retail store ownership in Supermarkets.