As mall owners and retailers continue to bear the brunt of coronavirus-related trade restrictions, individual retail sectors are seeing “highly divergent” consumer responses to the crisis.
The Covid-19 pandemic has caused an extraordinary surge in food and alcohol sales, along with a sharp drop in clothing and footwear, figures show.
NAB’s cashless retail sales data for March shows supermarkets and grocery stores were up 34.5 per cent on last year, while liquor and other specialised food grew 40.2 per cent year on year, as consumers stockpiled supplies.
Other retailing also surged, with pharmaceuticals, cosmetics and toiletries up 34.6 per cent.
“Our data shows frankly wild swings across industries in response to the coronavirus crisis,” NAB chief economist Alan Oster said.
Footwear fell 21.7 per cent year-on-year, while clothing was down 17.4 per cent.
“Given people are increasingly unable to leave the house, a lack of interest in clothing is perhaps unsurprising.”
Year-on-Year growth (%)
|NAB Cashless Index*||9.1||10.3||16.1|
|ABS Retail Trade||2.0||1.8||--|
|NAB ABS Retail Trade forecast||1.1||1.4||1.6|
^Source: NAB, ABS. *Data seasonally adjusted.
Pointing to a moderate rise of 0.2 per cent month-on-month in the ABS retail sales measure for March, Ostler said that overall, there was little to celebrate.
“The headline is increasingly not relevant for individual sectors facing highly-divergent consumer responses to the crisis.
“There is good reason to think that many of the areas that surged represent essentially one-off increases to stockpile food supplies, or make purchases of home computer or exercise equipment,” Oster said, adding that supermarket purchases are already returning somewhat towards normal levels.
Efforts to contain the virus are having a very sharp impact on the economy, with many businesses essentially unable to trade due to restrictions.
Oster said that business confidence in the NAB monthly business survey was at record lows—around three times as bad as the bottom of the 1990 recession—with similar unprecedented results reported for falls in forward orders and the level of capacity utilisation.
“We now expect unemployment to reach 11.75 per cent by mid-year and remain over 7 per cent until the end of 2021.
“Consumers are unlikely to make many discretionary purchases in this environment and we expect weak retail spending prints for some time.”