Retail surge reveals we’re getting back to normal
As Australian shoppers emerge from lockdown, and coronavirus restrictions ease, national retail sales have surged in the biggest monthly gain ever recorded by the ABS.
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Retail sales posted a record surge as shutdown shoppers reached for their wallets as coronavirus restrictions began to ease.
National retail turnover surged 16.3 per cent to $28.8 billion in May, seasonally adjusted figures released by the Australian Bureau of Statistics on Friday show.
It was the biggest monthly gain ever recorded by the ABS, which has been tracking retail sales for 38 years.
The rebound follows sales plunging by a record 17.7 per cent in April as the economy was put into hibernation having spiked 8.5 per cent in March as panic buying left supermarket shelves bare.
The latest sales figures were comfortably ahead of what economists had been expecting and turnover exceeded pre-COVID-19 levels from both February this year and May last year.
“Today’s data is a piece of really positive news for consumers and businesses alike,” CommSec chief economist Craig James said.
“It says that the economy is getting back to normal.”
Sales of clothing, footwear and personal accessories more than doubled in May.
However, spending in this segment remains more than 20 per cent where it was in the same month a year ago, the ABS said.
Spending at cafes, restaurants and on takeaway food rose by about 30 per in May but again remains well below where it was in May last year.
Household goods spending, which included furniture, home entertainment and office equipment and home improvement products, was another big mover.
The figures are preliminary and did not include a state by state breakdown.
Westpac economist Andrew Hanlan said the “wild COVID-19 ride” for the nation’s retailers was continuing.
“Retailing has quickly moved through a number of phases: temporary stockpiling in March; the lockdown driven plunge in April; and now a rebound, including an element of catch-up, in May,” he said.
The positive update came as it was revealed QBE Insurance decided to no longer protect suppliers to Myer and David Jones against bad debts from the department store chains.
The move by QBE to exclude Myer and David Jones from its trade credit insurance product indicates it is worried about their financial health.
Trade credit insurance protects a supplier against a buyer — in this case Myer and David Jones — from not being able to pay their debt.
Both Myer and David Jones rejected the insurer’s assessment of their businesses and the department store sector.
“We obviously don’t subscribe to QBE’s view around the future of department stores,” Myer said.
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