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Supermarket sales jump, but pandemic rocks hospitality

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
06 May 2020 2 minute readShare
retail

While supermarket sales increased in March, as a result of the coronavirus-spurred panic buying, significant falls were recorded in sales across hospitality and clothes retailing, latest data from the ABS has shown.

According to new data from the ABS, March saw both a record rise in food retailing and the strongest fall in cafés, restaurants and takeaway food services.

While month-on-month food retailing increased by 24.1 per cent in March, cafés, restaurants and takeaway food services suffered a 22.9 per cent drop in sales, followed closely by clothing and footwear retailers with a slump of 22.6 per cent.

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“COVID-19 heavily impacted retail trade in March,” said Ben James, director of ABS’ quarterly economy-wide surveys.

“There was unprecedented demand in food retailing, household goods and other retailing. However, the impact of social distancing regulations saw sales fall in cafés, restaurants and takeaway food services, and discretionary spending in clothing footwear and personal accessory retailing, and department stores, was also weak,” Mr James said.

 

Overall, Australian retail turnover rose by 8.5 per cent in March 2020 compared to February, seasonally adjusted.

Year-on-year growth stood at 10.1 per cent — consistent with expectations of strong pre-lockdown specific category growth, while the majority of retailers shut their doors for COVID-19 lockdown.

The figures confirm stronger expenditure year-on-year across food (+27.2 per cent), liquor (+33.9 per cent) and pharmacy (+29.4 per cent) categories, and a sales boost in household goods (+10.3 per cent) as Australians adapted to restrictions and stocked up on additional items for lockdown.

“March was the eye of the COVID-19 storm for retailers, with all but essential service retailers forced into closure of their physical stores during lockdown,” said Australian Retailers Association CEO Paul Zahra.

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“While that pain of closure has continued during April and into May, we have seen some gentle upside begin as many stores enhance their online and delivery services.”

Mr Zahra said retailers had swiftly adapted to the new conditions, with a jump in online sales set to become the new normal.

“Online sales have skyrocketed, and we expect that shopping habits we have seen will be permanent, as retailers offer new options such as kerbside pick-up and retail-to-go options,” he said.

Mr Zahra anticipated some enthusiasm from consumers as stores prepared for reopening, and said his desire was for the reopening to be sustainable and safe as people returned to retail stores.

He, however, acknowledged that the financial fallout of the coronavirus crisis has been “unquestionably tough” for retailers and opined that the true recovery picture won’t start to emerge for several weeks.

“We are likely to see a phased reopening. Retailers have different considerations — some will open key stores and wait to open others. Some have cafés attached and will need to delay that area opening. Others are still negotiating with landlords,” he said.

“While we expect Australians to soon celebrate their freedom with one of their favourite leisure activities — shopping — we do anticipate continued caution by consumers for some months forward as they assess overall economic conditions.”

Supermarket sales jump, but pandemic rocks hospitality
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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