Latest March turnover figures from the Australian Bureau of Statistics have laid bare the impact of coronavirus on the retail sector. Turnover surged 8.5% in March, up from a modest 0.6% increase in February. But while some sectors saw unprecedented demand, others saw sales plummet as restrictions kicked in.
Demand for food soars
Demand for food and household goods soared 24.1% and 9.1% respectively in March as people stocked up on isolation supplies. Supermarkets were a major beneficiary, with Coles Group Ltd (ASX: COL) reporting a 13.1% increase in supermarket sales in the March quarter. Woolworths Group Ltd (ASX: WOW) reported a 10.3% increase in sales from its Australian Food division during the quarter.
Cafes and clothing decline
But while food retailing saw the strongest rise in March, cafes, restaurants, and takeaway food services saw the largest fall. Sales in this sector fell 22.9% as a result of government restrictions. More than one-third of workers in the accommodation and food services industry have lost jobs since 14 March.
Other sectors doing it hard were clothing, footwear, and personal accessory retailing, which saw turnover fall 22.6%, and department stores, which were down 8.9%. ASX-listed department store Myer Holdings Ltd (ASX: MYR) closed its stores on 29 March and will extend the closure until at least 11 May 2020. Likewise, jewellery and accessories retailer Lovisa Holdings Ltd (ASX: LOV) has had to shutter stores worldwide, with reopenings dependent on local restrictions.
Nationwide increase in turnover
Rises in retail turnover occurred nationwide in March. The Northern Territory led the pack with a rise of 11.6%. It was followed by Western Australia with a 9.9% rise and the Australian Capital Territory with 9.5%. Victoria and New South Wales recorded growth of 7.7% and 8% respectively, while Queensland saw growth of 8.8%. Tasmania's retail turnover increased 8.9%.
Online spending surges
Online spending increased to 7.1% of total retail turnover in March, up from 6.6% in February. A number of ASX retailers have reported strong growth in online sales during the pandemic. Accent Group Ltd (ASX: AX1) has quadrupled online sales since stores were shuttered. Kathmandu Holding Ltd (ASX: KMD) has likewise seen online sales grow by 2.5 to 3 times.
Quarterly winners and losers
Over the quarter, rises in volumes were led by food retailing (6.4%), other retailing (3.9%), and household goods (2.2%). These were somewhat offset by seasonally adjusted volume falls in cafes, restaurants, and takeaway (-8.4%), clothing, footwear, and personal accessories (-12.1%) and department stores (-5.2%).
