SYDNEY (BLOOMBERG, REUTERS) – Australian retail sales soared by the most on record in March as households embarked on a buying frenzy, led by massive purchases of toilet paper, ahead of an expected lockdown to contain the coronavirus.
Preliminary sales advanced 8.2 per cent last month, exceeding the previous record of 8. per cent ahead of the introduction of a consumption tax in 2000, the Australian Bureau of Statistics said in a statement on Wednesday (April 22).
That beat the previous record rise of 8.1 per cent from 2002 when consumers brought forward purchases ahead of a goods and services tax.
There was “unprecedented demand in March in the food retailing industry, with strong sales across supermarkets, liquor retailing and other specialized food,” the ABS said. “Additional analysis indicates monthly turnover doubled for products such as toilet and tissue paper, and rice and pasta.”
Australians swamped supermarkets in March to buy up stocks of food and other essentials on a previously unseen scale, forcing some stores to introduce product limits. This is in contrast with large tracts of the nation’s services industry that are currently shut as authorities try to stem the outbreak.
The bureau said gains in food and alcohol “were slightly offset by strong falls in industries including cafes, restaurants and takeaway food services, and clothing, footwear and personal accessory retailing, which were impacted by new social distancing regulations introduced in March.”
Another gainer was electrical and hardware as consumers rushed to buy the equipment for home offices.
The increase was far larger than any economist had forecast and lifted sales to an all-time high of A$30 billion (S$27.1 billion). Sales were up a hefty A$2.28 billion on February, implying an addition to gross domestic product (GDP) of around 0.5 percentage points.
That unexpected windfall could keep growth positive, albeit temporarily. Most analysts had thought GDP would shrink modestly in Q1, ahead of a much more savage decline this quarter as the shutdown caused massive job losses and economic dislocation.
Reserve Bank of Australia (RBA) Governor Philip Lowe on Tuesday warned economic output could fall 10 per cent in the first half of the year, easily the harshest contraction since the Great Depression.
Yet consumer panic may just have rescued the first quarter. The lockdown, which began in mid-March, sparked a 23.5 per cent jump in sales for the food industry, with supermarkets and grocery stores selling an extra A$2.2 billion in goods.
The rise in supermarket sales reached a peak in mid-March before levelling off at the end of the month, the ABS said.
The ABS is conducting special surveys to provide more timely data during the pandemic. Its final estimate of retail sales is due on May 6.
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