CLB (ASX) Why Candy Club is a buy

A timely article in today’s Australian:

Shift to online shopping looks permanent even as virus controls ease:
19 MINUTES AGO JULY 2, 2020
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COVID-19 APPEARS TO HAVE PERMANENTLY SHIFTED CONSUMER HABITS TOWARDS ONLINE SHOPPING, WITH NAB’S ONLINE SALES INDEX FOR MAY CONTRACTING ONLY SLIGHTLY FROM ITS APRIL RESULT DESPITE THE LIFTING OF RESTRICTIONS ON TRADITIONAL RETAIL.
THE INDEX – WHICH MEASURES ALL ONLINE RETAIL SPENDING BY CONSUMERS USING VARIOUS ELECTRONIC PAYMENT METHODS – CONTRACTED BY JUST ONE PER CENT IN MAY AFTER GROWING BY A RECORD-BREAKING 16.4 PER CENT IN APRIL AND 8.1 PER CENT IN MARCH.
IN THE YEAR TO MAY, THE ONLINE RETAIL SALES INDEX GREW BY 50.4 PER CENT COMPARED TO THE ABS’S TRADITIONAL RETAIL INDEX GROWTH RATE OF 5.3 PER CENT IN THE SAME PERIOD.
NAB ESTIMATES INCREASED ONLINE SPENDING ON FOOD AND GROCERY DELIVERY, FASHION, MEDIA, GAMES AND TOYS AND HOMEWARES HAS SPURRED TOTAL ONLINE SPENDING TO $34.18BN IN THE 12 MONTHS TO MAY, REPRESENTING ROUGHLY 10.3 PER CENT OF ALL RETAIL TRADE.
NAB CHIEF ECONOMIST ALAN OSTER SAID THE TREND “FOR ONLINE RETAIL IS UP,” AND THAT HE EXPECTS IT TO REMAIN STRONGER THAN GROWTH IN TRADITIONAL RETAIL, IN LINE WITH THE STRUCTURAL SHIFT IN COUNTRIES LIKE THE US.
“THE US CENSUS BUREAU QUARTERLY E-COMMERCE ESTIMATE FOR ONLINE RETAIL IS ABOUT 11.5 PER CENT OF TOTAL US RETAIL SALES, A FIGURE NOT TOO DISSIMILAR TO OUR ESTIMATE FOR AUSTRALIA,” HE SAID.
“WHEN WE BEGAN THE NAB SERIES NEARLY A DECADE AGO, OUR ONLINE SERIES WAS ABOUT 4 PER CENT OF ALL RETAIL SALES, AGAIN SIMILAR TO THE US CENSUS BUREAU COMPARISON.
“OVER TIME, BOTH SERIES HAVE SEEN HIGH VOLATILITY, BUT HAVE GENERALLY OUTPACED BROADER RETAIL.
“SO, WHILE WE ARE EXPECTING ABS RETAIL TRADE TO BE FASTER THAN ONLINE RETAIL IN MAY IN MONTH-ON-MONTH TERMS, THE TREND FOR ONLINE REMAINS FAR STRONGER.”
THE BULK OF SALE GROWTH FOR RETAILERS THROUGHOUT THE CORONAVIRUS CRISIS HAS OCCURRED THROUGH ONLINE CHANNELS.
ON THURSDAY ADVENTURE WEAR COMPANY KATHMANDU SAID IT HAS SEEN ONLINE SAME-STORE SALES FOR ITS RIP CURL BRAND JUMP 151 PER CENT IN MAY AND JUNE, WITH ONLINE SALES REPRESENTING ONE-FIFTH OF DIRECT TO CONSUMER SALES ACROSS THE GROUP.
ONLINE FURNITURE AND HOMEWARES COMPANY TEMPLE & WEBSTER ON TUESDAY ANNOUNCED IT WOULD RAISE $40 MILLION TO INVEST IN EXPANDING THEIR ONLINE CAPACITY ON THE BACK OF STRONG SALES GROWTH, AND ONLINE MARKETPLACE KOGAN SAW ITS MARKET CAPITALISATION SURPASS THAT OF MYER AND DAVID JONES COMBINED AS MORE THAN 100,000 NEW CUSTOMERS JOINED ITS RANKS DURING LOCKDOWN.
TAKEWAY BOOMING
EVEN TRADITIONAL RETAILERS AND SERVICES BENEFITED THROUGH THEIR ONLINE CHANNELS, WITH RETAILERS HARVEY NORMAN AND JB HI-FI NOTING THE ROLE THEIR ONLINE DIVISIONS PLAYED IN THEIR PROFIT SURGES OF 20 PER CENT, WHILE SHARES IN COLLINS FOODS SOARED ON TUESDAY DUE TO THE POPULARITY OF THEIR FAST FOOD BRAND KFC ON THE DELIVEROO AND MENULOG DELIVERY APPS.
TAKEAWAY FOOD WAS THE CATEGORY WITH THE STRONGEST GROWTH, UP 12 PER CENT AS DEMAND FOR DELIVERY REMAINED HIGH IN MAY DESPITE RESTAURANTS REOPENING.
GROWTH IN THIS CATEGORY WAS DRIVEN BY INCREASES OUTSIDE METROPOLITAN AREAS, WITH THE AVERAGE ORDER SPEND IN CAIRNS IN NORTHERN QUEENSLAND GROWING BY ALMOST $12 WHEN COMPARED TO MAY 2019.
“WE ESTIMATE MAY 2020 SALES IN THIS CATEGORY TO BE ALMOST THREE TIMES LARGER THAN MAY 2019,” MR OSTER SAID.
“THIS GROWTH OVER THE PAST YEAR HAS OCCURRED DURING A PERIOD WHERE THERE WERE HIGH-PROFILE EXITS AND ENTRIES, AND ALSO AN INCREASED FOCUS ON PLATFORM COMMISSIONS FROM LOCAL START-UPS.”
THE FASHION, GROCERY AND LIQUOR CATEGORIES ALSO SAW POSITIVE GROWTH IN MAY, WHILE SALES FOR GAMES AND TOYS, RECREATIONAL GOODS, MEDIA, HOMEWARES AND DEPARTMENT STORES ALL CONTRACTED.
ONLINE RETAIL SPENDING CONTRACTED IN ALL STATES BUT QUEENSLAND OVER MAY BUT REMAINED IN POSITIVE GROWTH IN RURAL AREAS.
“ONLY REGIONAL AREAS GREW IN THE MONTH, BUT AT A RATE MUCH LOWER THAN APRIL,” MR OSTER SAID.
“METRO AREAS, WHICH REPRESENT THE MAJORITY OF ONLINE SPEND, CONTRACTED AFTER TWO RAPID MONTHS OF SALES GROWTH.
“FOR REGIONAL AREAS, IN YEAR-ON-YEAR TERMS, GROWTH HAS BEEN DRIVEN BY THE TWO LARGEST SALES STATES, NSW AND VIC, ALONG WITH SMALLER SALES STATE, TASMANIA.”
SPENDING WITH INTERNATIONAL MERCHANTS SLOWED SLIGHTLY BUT REMAINED IN POSITIVE GROWTH, WHILE SALES GROWTH TURNED NEGATIVE FOR DOMESTIC RETAILERS