Retail Sales — May | By the numbers
- Nominal retail turnover surged up by 16.9% in May to $28.971bn coming in ahead of the preliminary estimate and consensus forecast of 16.3%. Retail spending had fallen at a record pace in April (-17.7%) amid the shutdown. In annual terms, growth swung from -9.2% to +5.8%.
Retail Sales — May | The details
As expected, retail spending lifted at a record pace in the month of May (16.9%) with this result being stronger than what was reported by the ABS in their preliminary estimate two weeks ago (16.3%). In nominal terms, turnover came in at $28.971bn on the month after falling to $24.791bn in April — its lowest level going back to October 2015 — and in March it printed at its highest level on record at $30.110bn as spending at supermarkets, pharmacies, liquor stores, and household goods retailers soared. In a good sign for the domestic economy, retail turnover has recovered to be 4.4% above its pre-COVID-19 level from February and was undoubtedly helped by the success Australia had in containing the virus giving confidence to people that it was safe to venture out again and by pent-up saving with government's fiscal measures providing support to incomes.
Turning to the states, as the summary table in the 'By the numbers' section highlights spending lifted at a very strong pace in each state in May. However, the key insight is that retail sales have recovered to be above their pre-pandemic levels in every state except for Victoria. Since February, sales have advanced in New South Wales (3.8%), Queensland (7.0%), South Australia (8.5%), Western Australia (9.4%) and Tasmania (5.3%) but they are down by 0.4% in Victoria.
As expected, retail spending lifted at a record pace in the month of May (16.9%) with this result being stronger than what was reported by the ABS in their preliminary estimate two weeks ago (16.3%). In nominal terms, turnover came in at $28.971bn on the month after falling to $24.791bn in April — its lowest level going back to October 2015 — and in March it printed at its highest level on record at $30.110bn as spending at supermarkets, pharmacies, liquor stores, and household goods retailers soared. In a good sign for the domestic economy, retail turnover has recovered to be 4.4% above its pre-COVID-19 level from February and was undoubtedly helped by the success Australia had in containing the virus giving confidence to people that it was safe to venture out again and by pent-up saving with government's fiscal measures providing support to incomes.
Across the major categories, there were some extraordinary increases in turnover when measured in percentage terms as shown in the chart, below, highlighted by a 129.2% rise in spending on clothing and footwear.
However, for a cleaner read on the dynamics, the next chart shows the percentage changes in turnover across the categories in May compared to their pre-pandemic levels in February. On this basis, total spending is up by 4.4%, with turnover soaring in household goods (27.1%) likely driven by working from home arrangements, while it has also risen across basic food (9.9%), department stores (12%) and 'other' (9.3%). Hardest hit by the pandemic has been restaurants, cafes and takeaway food (-34.8%) due to mandated closures, in which spending at restaurants and cafes is down by 54.1% from 3 months ago while takeaway services have seen a 9.4% fall over the period. Meanwhile, spending on clothing, footwear and personal accessories has declined by 17.7% since February notwithstanding the 129.2% rise in May. For a guide on discretionary spending, sales ex-food has overall held up over the pandemic (0.4%).
Retail Sales — May | Insights
