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Retail sales soar in May
Retail sales have grown by nearly 17 per cent for the month of May as COVID-19 restrictions eased, allowing retailers that previously closed to reopen their doors.
Retail sales soar in May
Retail sales have grown by nearly 17 per cent for the month of May as COVID-19 restrictions eased, allowing retailers that previously closed to reopen their doors.
Seasonally adjusted data from the ABS has shown a 16.9 per cent spike in sales following a low in April.
“The gradual easing of social distancing regulations and the reopening of physical stores bolstered retail trade in May,” said Ben James, director of Quarterly Economy Wide Surveys.
“Retailers across a range of industries reported high numbers of consumers returning to stores, with some retailers noting levels similar to those seen in December.”
There were large month-on-month rises in clothing, footwear and personal accessory retailing (129.2 per cent), and cafes, restaurants and takeaway food services (30.3 per cent), with both industries coming off very low levels of trade in April. Levels in these industries remain well below the same time last year.
Food retailing (7.2 per cent), household goods retailing (16.6 per cent), department stores (44.4 per cent) and other retailing (9.4 per cent) all recorded month-on-month rises in seasonally adjusted terms and are now at levels well above the same time last year. Retailers reported themes of continued spend on home improvements and high demand for recreational goods.
However, UBS notes the bounce mostly favoured larger retailers, which continue to dominate the market.
“Importantly, large listed retailers continue to take share and rose to a record 75.6 per cent of total retail sales. While small retailers bounced, they remained in deep contraction,” UBS economist George Tharenou said.
UBS predicts the stronger growth to continue into the next month as foot traffic increases due to more retailers opening their stores.
“Looking forward to June, discretionary retail foot traffic has continued to improve, tracking down 26.6 per cent in June after -42.5 per cent in May and -82.3 per cent in April, but the improvement has slowed sharply since early June.”
“Similarly, Google mobility data for retail showed a sharp improvement from May to June (averaging -17.5 per cent after -29.7 per cent), but has recently plateaued ~15 per cent below the baseline. This suggests that the pace of improvement in retail sales and consumer spending has peaked,” Mr Tharenou concluded.
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