Coronavirus: March retail sales data sets new growth record

A spectacular stockpiling of groceries has led to the biggest ever monthly jump in retail sales, with March’s increase 14 times that of February.

People queuing for a delivery of groceries at a Coles supermarket in Epping in Sydney’s northern districts in March. Picture: AAP

A spectacular stockpiling of groceries and supermarket essentials has led to the biggest ever monthly jump in retail sales, ahead of an anticipated slump in spending as the COVID-19 economic downturn shutters businesses and puts hundreds of thousands out of work.

Rising fear in March that the pandemic would restrict access to items such as toilet paper, rice and pasta led to panic buying and drove an 8.5 per cent jump in retail sales — the largest monthly rise in the 38-year history of the Australian Bureau of Statistics data, and 14 times as large as the 0.6 per cent increase in February.

Australian shoppers spent $2.4bn more in March than in February, on seasonally adjusted figures — equivalent to more than 42 months’ of growth in one month. Total spending reached $30.1bn.

ABS director of quarterly economy-wide surveys Ben James ­described the demand for some ­essential goods as “unprecedented”, as was the collapse in spending in industries that have since been brought to a standstill by social-distancing measures to control the spread of the virus.

“The March month saw both the strongest rise in food retailing, and the strongest fall in cafes, restaurants and takeaway food ser­vices that we have seen in the history of the series,” Mr James said.

Food sales surged 24 per cent, “other” retailing climbed 17 per cent and household goods sales jumped 9 per cent, the ABS data showed.

It was a very different story for cafes, restaurants and takeaway food services, which suffered a 23 per cent plunge in sales through March as Australians increasingly confined themselves to their homes.

Spending on discretionary goods such as clothing and footwear also dropped 23 per cent, and department store retailing fell 9 per cent, the ABS said.

It also used scanner data from supermarkets to help paint a picture of an extraordinary spending on hoarders’ favourite essentials.

Spending on non-perishable goods rocketed up 39 per cent in the month, in non-seasonally ­adjusted terms.

 

Canned food sales almost ­tripled, while flour sales were up 150 per cent and toilet paper sales more than doubled.

Perishable goods, which includes items such as fresh vege­tables and meat, climbed 22 per cent.

Australians prepared for working from home by spending big on home office equipment.

Electrical and electronic goods retailing lifted 11 per cent in the month, as overall household goods retailing climbed 9 per cent.

With the prospect of more time spent at home, we also invested 17 per cent more in hardware, building and garden supplies than in February.

More up-to-date card spending data from the major banks indicates hoarding of essential items largely ceased in recent weeks, suggesting a similarly historic reversal in spending over April as restrictions forced the closure of many retailers.

Looking ahead, a surging unemployment rate and a collapse in household incomes presents a dour outlook for retail spending.

The ABS also said real, or after inflation, sales volumes for the March quarter lifted 0.7 per cent.

With retail trade only 30 per cent of consumption in the national accounts, economists remain cautious that the solid spending figures will help support growth in the first three months of the year.

“Grocery stockpiling somewhat offset the negative spending effects of COVID-19 lockdown constraints, but wasn’t enough to create a spike in total retail volumes,” ANZ economist Adelaide Timbrell said.

“This suggests total household expenditure for [the first quarter] may not be strong enough to ­herald a positive GDP result.”