Newly appointed Australian Retailers Association CEO Paul Zahra said today that preliminary estimates of March retail trade from the Australian Bureau of Statistics, forecasting annual growth of 9.8%, should be read with “caution” given the breakdown of the forecast and the fact worse lay ahead as retail shutdowns continued.
Mr Zahra said while the forecast was no surprise in trend terms – showing rises in categories such as food, beverages, pharmacy, and electrical, offset by steep falls elsewhere in the sector – it was important to remember panic buying witnessed in March was beginning to subside, and that the overall spike was likely a blip.
“The ARA has consistently said since the Coronavirus event began that some categories would do extremely well in the initial stages, and this bears that out in regard to supermarkets and pharmacies,” Mr Zahra said.
“With the ABS forecasting food up 23.5% in March, with groceries up 35.6% and items such as toilet paper and pasta selling at twice the usual rate, these numbers mask big falls across the rest of the retail sector,” he added.
Mr Zahra said the ABS forecast – which will be validated and released as official data on 4 May – mirrored trends that had started to appear in the bureau’s February numbers, with pharmacies, supermarkets and electrical goods retailing all doing well as people stockpiled goods ahead of anticipated lockdowns.
“Just as we saw anecdotal markers of customer buying trends before they appeared in official data, I note it’s now recognised that spending on supermarket and pharmacy items is also starting to fall to normal,” he said.
Mr Zahra said that with more retailers ceasing to trade since 1 April and with panic buying and stockpiling apparently starting to abate, it was probable an overall slump in retail spending was yet to be seen in trade data.
“We’re always happy to see increases anywhere in retail, but I’d urge extreme caution in reading much into these numbers, as we know the economy is going into recession and retail will be significantly affected,” he said.
Mr Zahra said while he shared the general desire to reopen the economy and get customers back into retail stores, any restart was likely to still be some time away – and had to be done properly when it occurred.
“It’s great the number of Coronavirus cases is falling, but it’ll take time for those to resolve even after new cases stop altogether: any lifting of lockdowns has to be done with the health and safety of retail staff and customers as the top priority. We want to open for business, but we need to do it properly when we do,” Mr Zahra concluded.