March retail +10% y/y: Supermarkets + household goods drives growth
March ABS retail was +10% y/y; strong, but driven by panic buying, which was partially offset by early impacts from COVID-19 restrictions. Categories such as supermarkets (+27% y/y), hardware (+18% y/y) and other recreational (+17%) all benefited, while café/restaurants (-32% y/y), clothing (-27%) and furniture (-5%) were negatively impacted. Trends were consistent with listed updates, with independents (+24% y/y) closing to gap to majors in grocery (+26% y/y) and household goods strong; consistent with WES / JBH. The main surprises for us were: 1. Only modest decline in department stores: Albeit this is led by discount department stores, with feedback also suggesting a large drop in April; and, 2. 10% decline in takeaway, with online / delivery not offsetting pick-up / eat-in declines.
Retail trends have deteriorated materially into April
Our channel checks and listed updates from WES (Kmart / Target) and BAP (Autobarn) suggest trading deteriorated materially into April for discretionary retail and that grocery spend has begun to normalise. Shoppertrak footfall data, which has a discretionary apparel skew, has footfall down >85% in April. Across grocery we believe sales are up 5-10%, in department stores down double-digit and apparel / footwear down >50% y/y. Household goods sales have however remained resilient.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
