This was published 4 years ago
Australians spent extra $2.7 billion stocking pantries in March
By Shane Wright
Hoarders of toilet paper and canned goods have delivered the biggest one-month surge in retail sales on record, but it won't be enough to stop the economy from contracting.
The Australian Bureau of Statistics released partial data on Wednesday showing retail sales had soared by 8.2 per cent in March.
Supermarkets and grocery stores drove the lift along with alcohol and other specialised foods. Food sales were up 23.5 per cent or more than $2.7 billion.
Toilet and tissue paper sales more than doubled, as did flour, rice and pasta. There was a 50 per cent jump in canned foods, cleaning goods and medicinal products.
The bureau noted there was a peak in mid-March before sales levelled off towards the end of the month as people ran out of space to store their goods.
Other areas to benefit were the electrical and hardware sectors, as people rushed to set up home offices.
The March surge was the largest monthly jump in spending on record, eclipsing the previous record of 8.1 per cent set in June 2000 ahead of the introduction of the GST. That was followed by the worst monthly result on record: a 10.6 per cent drop in spending in July of that year.
But parts of the retail sector took a hammering through the month as the coronavirus crisis deepened.
Turnover through cafes, restaurants and takeaways tumbled by 20 per cent. Clothing sales fell by a similar amount.
Department store sales dropped by 10 per cent as shoppers spent their time either at home or in supermarket aisles.
The figures followed data from the Housing Industry Association that showed new home sales down 23.2 per cent in March.
There were big falls across all states, with sales down by 31.6 per cent in Western Australia. The "best" result was in Victoria where sales dropped by 16.9 per cent.
In a sign that retail conditions had been improving before the coronavirus pandemic, sales through the March quarter were down by 0.9 per compared to the same period last year.
AMP senior economist Diana Mousina said panic buying of food and alcohol had supported the overall retail sector through the month.
But that would end as people ate through their supplies of canned tomatoes while social distancing rules prevented consumers from heading out to cafes.
"In contrast, March US retail sales were down more than 8 per cent – clearly Australians were panic buying more than the Americans," she said.
Ms Mousina said overall retail spending was likely to boost March quarter GDP by 0.4 percentage points, but that would not be enough to save broader consumer spending.
"Motor vehicle sales are down nearly 18 per cent over the year to March and will drag on spending," she said.
"As well, the increased demand for grocery items will lead to a big run-down in inventories which detracts from GDP growth. We still expect March-quarter GDP to be negative."
The last negative quarter of growth was recorded in March 2011.