Australia has experienced the strongest rise in monthly retail turnover since the Australian Bureau of Statistics (ABS) started tracking retail trade in 1982.
At first glance, the numbers seem unbelievably strong, showing sales climbing 8.5 per cent in March, 8.2 per cent seasonally adjusted, according to the ABS, with online retail having contributed 7.1 per cent to the total retail turnover.
But National Retail Association CEO Dominique Lamb said the recent figures are showing some incredibly ominous signs of the impact the COVID-19 health crisis will have on the sector.
“March saw the peak in panic buying in supermarkets, particularly for items such as toilet paper, rice and pasta,” Lamb said. “Today’s report also shows a nosedive in sales for cafes, restaurants, takeaway food services, and clothing.”
ABS figures show a 24.1 per cent rise in food retailing; other retailing 16.6 per cent; and household goods retailing 9.1 per cent. These rises were partially offset by a fall in cafes, restaurants and takeaway food services, down 22.9 per cent; clothing, footwear and personal accessory retailing down 22.6 per cent; and department stores showing a decrease of 8.9 per cent.
“COVID-19 heavily impacted retail trade in March,” said Ben James, director of ABS’s Quarterly Economy Wide Surveys.
“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,” James said.
In seasonally adjusted terms, there were rises in New South Wales (8.0 per cent), Victoria (7.7 per cent), Queensland (8.8 per cent), Western Australia (9.9 per cent), South Australia (9.4 per cent), Tasmania (8.9 per cent), the Australian Capital Territory (9.5 per cent), and the Northern Territory (11.6 per cent) in March 2020.
The NAB Online Retail Sales Index data also indicated the rebound in online spend continued in March, with a 5.6 per cent rise on a month-on-month, seasonally adjusted basis. This represents an acceleration on upwardly revised growth in February (2.2 per cent month-on-month, seasonally adjusted).
In year-on-year terms, the growth in the NAB Online Retail Sales Index accelerated 21.8 per cent year-on-year, seasonally adjusted, in March, and it continues to outpace the broader ABS retail sales series in year on year terms.
According to the NAB data, six of the eight categories recorded sales growth in month-on-month growth terms. Department stores recorded the highest growth in month-on-month terms in March. The largest spend share category, homewares and appliances, also grew, at a pace slightly faster than the broader index in the month. While takeaway food is still up strongly over the year, this category, and fashion, contracted in the month.
Paul Zahra, Australian Retailers Association CEO, said they had anticipated the jump in online sales as retailers had swiftly adapted to the new conditions.
“Online sales have skyrocketed, and we expect that shopping habits we have seen will be permanent as retailers offer new options such as kerb-side pickup and retail-to-go options,” Zahra said.
As stores start to reopen, Zahra said they anticipate some enthusiasm from consumers and said his desire was for the reopening to be sustainable and safe as people returned to retail stores.