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Supermarket sales roar as virus panic sets in
As the major supermarkets battle to keep products on the shelves, new data has revealed the impact it is having on grocery sales.
Supermarket sales roar as virus panic sets in
As the major supermarkets battle to keep products on the shelves, new data has revealed the impact it is having on grocery sales.
According to UBS retail analyst Ben Gilbert, estimates suggest supermarket sales should have risen at least 25 per cent year-on-year in recent weeks, as Aussies stock up on basic goods.
“This is consistent with global trends where the UK has seen categories such as tissues and pasta up over 50 per cent for the week commencing 1 March.
“That said, increased sales have come with increased costs through the supply chain, which limits the level of operating leverage we might normally expect. We now forecast quarter one industry supermarket sales +9.5 per cent year-on-year and quarter two +6.1,” Mr Gilbert said.
NAB says its mapping states retail trade will rise by 0.6 per cent in February month-on-month following a 0.3 per cent fall in January.
This result is higher than might have been expected given the strain on the Australian economy following the bushfires and the coronavirus (COVID-19) pandemic.
There are three potential factors underlying this result. Firstly, January was a very weak month due to the fires, and the first part of February likely saw a return to something resembling normality for parts of the retail sector (although this has now dissipated).
Secondly, the ABS seasonal factors are potentially lagging changed consumption trends.
Thirdly, by late February, spending at supermarkets was beginning to ramp up in response to coronavirus, although the major ramp-up didn’t begin until March.
NAB chief economist Alan Oster said, “Panic buying has now set in at supermarkets across Australia. While this will boost the headline retail sales figure in March, other retail sectors and consumption spend more generally in areas such as health, education, restaurants and other services, including airlines, face massive challenges.”
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