Food, booze buying surges but clothes left hanging

Spending on food, alcohol and health surged over the past week, according to credit card data from Commonwealth Bank.

CBA credit card data from the past week indicates that shoppers splurged on food, alcohol and medical products. Picture: Mark Cranitch.

Spending on food, alcohol and health surged over the past week, according to credit card transaction data from Commonwealth Bank.

At the same time outlays on clothing and footwear, recreation, air travel and education fell sharply, the CBA figures reveal, as coronavirus fears spread through the economy.

Spending in Woolworths, Coles and Metcash Food over the past week was up 49.7 per cent on the same week a year ago.

“Food goods, which largely comprises grocery stores and ­supermarkets, is up by a whopping 74.1 per cent on year-ago ­levels,” CBA said.

Food services in cafes and restaurants is down 1.3 per cent, after averaging about 20 per cent growth earlier this year.

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Spending on alcohol has surged 20.4 per cent over the past week as households stockpiled beer, wine and spirits.

Households are also stockpiling pharmaceutical goods, with spending on medical care and health accelerating 24.5 per cent.

However, spending on recreation, including air travel, accommodation and travel services, fell 16.4 per cent. Even spending on public transport fell more than 7 per cent, due to large numbers of people working from home.

The CBA economics team says spending on food may lead to an increase in household spending for the March quarter.

But CBA chief economist ­Michael Blythe said the services sector was being hit hard by the cancellation of events, general fears about social interaction and a very sharp decline in offshore demand as travel restrictions bite.

The bank reports that in March coronavirus contributed to the fastest fall in manufacturing production in the CBA survey’s four-year history.

In brighter news, some manufacturers expanded production as Chinese imports declined.

“The one slightly more positive indication from the flash Purchasing Manager Index readings is the relatively muted pullback in the employment indexes,” CBA said. “This response offers some hope that, with the right mix of economic policies, the damage to the labour market from the coronavirus can be contained.”