Indications are the coronavirus-driven boom in retail sales is continuing into the 2020 – 21 financial year – but not in lockdowned Victoria.
We saw last week record 2019-20 sales figures and profits from the likes of JB Hi-Fi, Bunnings, Officeworks, and Kmart (but not from struggling Target).
This Friday, Harvey Norman reports its full-year results with a 20% rise in earnings forecast. other smaller retailers are due to report – Super Retail, Mosaic, and retail/property trusts like Scentre (Westfield with a huge impairment loss) and Stockland (with a loss as well).
Woolworths’ figures on Friday will be the major drawcard with analysts watching to see if it has matched Coles group’s sales and profits gains.
The Australian Bureau of Statistics (ABS) reported on Friday that July’s retail sales rose 3.3% from June to be up a massive 12% from July, 2019.
That’s the strongest annual sales growth since June 2000, just before the introduction of the GST.
“Retail turnover rose in all states and territories except Victoria in July. The rise across the rest of the country was driven by continued strength in household goods retailing, and the recovery in cafes, restaurants and takeaway food services, and clothing, footwear and personal accessory retailing” according to Ben James, the ABS’s Director of Quarterly Economy Wide Surveys.
“Victoria’s decline in retail turnover coincided with increasing numbers of COVID-19 cases, and the re-introduction of Stage 3 stay-at-home restrictions in July, impacting turnover.”
At the national level, household goods retailing led the monthly rises across the industries in July. Turnover in household goods was up 30% from July 2019 levels, with sales of furniture, whitegoods, and electrical items remaining high.
Other retailing and department stores saw monthly rises similar to that for household goods in percentage terms.
The ABS said food retailing saw a rise of 1.2%, with supermarket and grocery store turnover, elevated in Victoria especially, with spikes in sales of non-perishable items evident in July.
“Turnover continued to increase in Clothing, footwear and personal accessory retailing, and Cafes, restaurants and takeaway food services, following large falls in March and April 2020. Increases were reported in all states and territories, with the exception of Victoria,“ the ABS said..
Victoria though saw a fall in retail sales. The ABS said sales in Victoria fell 2% from June 2020 to July 2020, and it is the only state to record a monthly fall.
“Victorian turnover fell across Clothing, footwear and personal accessory retailing, Cafes, restaurants and takeaway food services, and Department stores. These falls were slightly offset by rises in Food retailing, as spending increased in Supermarkets.
Looking at the makeup of retail sales, the ABS said sales of perishable goods were up 15.4% in July, Non-perishable goods rose 14.3%, and All other products rose 10.2%, compared with July 2019.
Victoria recorded the largest through-the-year rises of Perishable goods (25.1%) and Non-perishable goods (22.9%) as worried consumers stockpiled (hoarded) ahead of the start of tighter lockdowns in early August.
It’s clear that retail sales for August will be weak across the board because of the tightening in Victoria.
