Australian Retailers Association Executive Director Russell Zimmerman said February data from the Australian Bureau of Statistics, with annual retail sales growth of 1.82%, was a “mild preview” of the impact of the Coronavirus pandemic, warning there was “far worse to come” when figures for March are released next month.
Mr Zimmerman said the result reflected what he expected to be a more pronounced trend when March figures are available, with rises in February in essential categories offset by sharp falls in almost every other category.
“I think the safest word to use about the retail trade data released by the ABS today is ‘predictable,’ because we knew this was coming, and we certainly haven’t seen the full extent of it yet,” Mr Zimmerman said.
“Remembering the impact of Coronavirus and government responses to it were in their infancy in the last week or two of February, today’s numbers are a pretty mild preview of far worse to come moving forward,” he added.
Mr Zimmerman said the categories that experienced growth in February were also predictable – given consumer behaviour over the past six weeks – with Pharmacies (6.64%), Supermarkets (3.57%) and Takeaway (5.05%) recording the biggest improvement on an annualised basis, while discretionary expenditure went backwards.
“Remembering media reports – supermarkets being cleaned out, over-the-counter medicines being hoarded, and failing restaurants as people began to dodge crowds near the end of February – this is no surprise,” he said.
Mr Zimmerman said the shift in consumer spending in February on a year-on-year basis was even more pronounced on the month-on-month measure and warned today’s figures, showing an overall increase and some seemingly good results, masked the impact of shutdowns and empty shops that was yet to appear in trade data.
“Virtually all of the increases we’ve seen in these figures are in those areas people are stocking up; the so-called Toilet Paper Emergency might have been a bit of a joke for some, but it’s a sign a big fall in retail,” he said.
“Household items, non-perishable foods, commodities like toilet paper, medicines, electrical goods, some department store lines…these are the categories that experience a surge when people believe they’re going to be housebound for a protracted period of time – which is exactly what’s happening,” Mr Zimmerman said.
“The retail sector has faced challenges for most of the year, and this simply exacerbates those too,” he added.
Mr Zimmerman said already low consumer confidence, and plunging retail trade volumes as the year progressed, were unlikely to rebound quickly when the Coronavirus pandemic eventually peters out.
“Given we’re moving into recession – with reputable forecasts suggesting it could rival the great depression – there’s no point sugar coating the fact that as poor as these data are, we expect to see much worse, and we call on consumers and the government to support our industry in whatever way they can,” Mr Zimmerman concluded.
Monthly Retail Growth (January 2020 – February 2020, seasonally adjusted)
Department stores (3.06%), Food retailing (0.82%), Household goods retailing (0.71%), Cafés, restaurants and takeaway food services (0.20%), Other retailing (0.15%), and Clothing, footwear and personal accessory retailing (-2.88%).
Western Australia (1.16%), Australian Capital Territory (1.04%), Queensland (0.84%), Victoria (0.48%), South Australia (0.44%), Tasmania (0.00%), New South Wales (-0.03%), and Northern Territory (-0.73%).
Overall month-on-month sales growth: 0.45%.
Year-on-Year Retail Growth (February 2019 – February 2020, seasonally adjusted)
Food retailing (3.00%), Cafés, restaurants and takeaway food services (1.73%), Other retailing (1.70%), Household goods retailing (1.30%), and Department stores (1.18%), and Clothing, footwear and personal accessory retailing (-2.32%).
Tasmania (6.06%), Queensland (4.76%), Victoria (2.50%), Western Australia (2.39%), Australian Capital Territory (1.28%), South Australia (0.93%), Northern Territory (0.54%), and New South Wales (-0.75%).
Overall year-on-year sales growth: 1.82%.