Retail turnover surged by a monthly record of 8.2 per cent in March as consumers rushed to stockpile groceries and office supplies ahead of COVID-19 lockdowns.
Shoppers frantically buying food staples and electronics drove retail trade up by $2.2 billion to $30.04 billion for the month, according to preliminary seasonally adjusted figures released on Wednesday.
Monthly turnover doubled for products such as toilet and tissue paper, flour, rice and pasta between February and March, while turnover for canned food, medicinal products and cleaning goods increased by more than 50 per cent.
Strength was also seen in other non-food sub-groups, for example, in electrical and hardware, where business reported an increase in sales of items related to the set-up of home offices.
The boost to spending is likely to be unwound in April, however, as households ease on their panic buying.
“Without this support retail turnover is expected to fall sharply,” BIS Oxford chief economist Sarah Hunter said.
“The drag from the collapse in discretionary spending will remain, and the impact of job losses, reduced hours and wage cuts will also begin to bite.”
The ABS said March was the strongest seasonally adjusted monthly rise ever published in the Retail Trade publication, surpassing an increase of 8.1 per cent in June 2000 when households brought forward expenditure ahead of the GST implementation.
The strong retail figures will likely be rare spot of positivity amid a dour flow of economic data in the coming weeks.
Australian Bureau of Statistics figures released on Tuesday showed the number of jobs in Australia dropped by six per cent over March.
Reserve Bank of Australia governor Philip Lowe says the shadow of the crisis will loom over the country for a long time yet.
The central bank on Tuesday forecasts the economy will contract by about 10 per cent over the first half of 2020 and for unemployment to match this rate – doubling the pre-crisis level.
Wednesday’s March retail estimate comes ahead of final data to be released on May 6.
The preliminary data provided by businesses makes up approximately 80 per cent of total retail turnover.
February retail trade had risen by 0.5 per cent to $27.8 billion as shoppers began stocking their pantries to weather the COVID-19 storm.
A 23.5 per cent increase in the food retailing industry accelerated the surge in March with supermarkets and grocery stores, liquor retailing, and other specialised food retailing all recording increases in demand.
The ABS said analysis of supermarket and grocery store scanner data showed monthly turnover for perishable groceries and all other groceries increased in original terms by 21.6 per cent and 35.6 per cent respectively since February.
The rise in supermarket retail turnover reached a peak in mid-March before levelling off at the end of the month.
NAB’s Kaixin Owyong said limits on some purchases would also weigh in the period ahead.
“At the same time, some spending, such as at cafes and restaurants, has stopped given stricter health measures,” Ms owyong said.
There was weakness in cafes, restaurants and takeaway food services in March, as well as clothing, footwear and personal accessory retailing and department stores.
These industries recorded strong falls in turnover as a number of factors, including regulations regarding social distancing measures, limited the ability of businesses to trade as normal.
The Australia dollar edged up to 62.94 US cents after the 1130 AEST release of Wednesday’s retail data and was worth 63.08 US cents at 1347 AEST.