A rush to stockpile groceries and office supplies ahead of looming COVID-19 lockdown measures pushed retail turnover up by a monthly record of 8.2% in March.
And if the overseas experience is any guide, retail sales will plunge dramatically this month when the report is released at the start of May.
March’s surge is a one-off and confirms what we saw on Tv news, sometimes with our own eyes or in newspapers – people fighting for toilet rolls, wrestling each other to grab the last bag of rice.
The hoarding rush for food staples and electronics drove March retail turnover up by $2.2 billion to $30.04 billion, according to preliminary seasonally adjusted figures released on Wednesday by the Australian Bureau of Statistics.
Sales in February were a seasonally adjusted $27.8 billion.
It was the second preliminary sales report from the ABS – the first was in late March for February and showed a 0.4% rise, later revised up to 0.5%.
The gains were centered on supermarkets and shops selling other household goods.
Understandably there was a weakness in cafes, restaurants and takeaway food services, as well as clothing, footwear and personal accessory retailing and department stores which were impacted by the new social distancing regulations introduced in March.
This boost has faded already. Shoppers report supplies of essentials such as toilet rolls, rice, tissues, pasta, hand washes are almost back to normal.
“Without this support retail turnover is expected to fall sharply,” BIS Oxford chief economist Sarah Hunter said on Wednesday.
“The drag from the collapse in discretionary spending will remain, and the impact of job losses, reduced hours and wage cuts will also begin to bite.”
The ABS data showed that monthly turnover doubled for products such as toilet and tissue paper, flour, rice and pasta between February and March, while turnover for canned food, medicinal products, and cleaning goods increased by more than 50%.
Sales in other non-food sub-groups, for example, in electrical and hardware (home office equipment) jumped as well – JB Hi-Fi and Harvey Norman have confirmed that.
The ABS said this is the strongest seasonally adjusted monthly rise ever published in the Retail Trade report, topping the 8.1% rise in June 2000 when households brought forward expenditure ahead of the GST implementation. Retail sales fell for the next couple of months.
The ABS reported on Monday and Tuesday that upwards of 400,000 people lost their jobs in March, hours have been cut and wages cut as well.
Wednesday’s March retail will be followed up by the release of final data on May 6. The ABS said the preliminary data was provided by businesses makes up approximately 80% of total retail turnover. The percentage for April could be much less given the scope of closures since then.
