Coronavirus boosts Australian retail turnover in March

The latest ABS March turnover figures have laid bare the impact of coronavirus on the retail sector. While some sectors saw unprecedented demand, others saw sales plummet.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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%). 

Motley Fool contributor Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Accent Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Retail Shares

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Retail Shares

3 reasons this broker thinks Woolworths shares are a cheap buy

Is this supermarket giant being undervalued by the market?

Read more »

A woman sits on sofa pondering a question.
Retail Shares

ASX retail shares mixed amid modest April sales growth

What does the latest sales data mean for ASX retail shares?

Read more »

Man on a laptop thinking.
Broker Notes

Why did Goldman Sachs just downgrade Wesfarmers shares?

The ASX 200 conglomerate has had a ripper run of share price growth. So why is Goldman Sachs downgrading it?

Read more »

Woman checking out new iPads.
Retail Shares

Dump 'em! Top broker says sell these 3 ASX retail shares

This comes amid high interest rates, weak retail sales, and persistently negative consumer sentiment.

Read more »

A woman looks at a tablet device while in the aisles of a hardware style store amid stacked boxes on shelves representing Bunnings and the Wesfarmers share price
Retail Shares

What is the price target for Wesfarmers shares?

Is there further success coming for this retail giant?

Read more »

A laughing woman pushes her friend, who has her arms outstretched, in a supermarket trolley.
Retail Shares

Goldman says these 6 ASX retail shares are a buying opportunity

The latest retail trading data was historically weak, according to the Australian Bureau of Statistics.

Read more »

Woman checking out new laptops.
Retail Shares

Are JB Hi-Fi shares still a buy as growth slows?

Is this stock worth a bargain basket buy?

Read more »

Young people shopping in mall and having fun.
Opinions

I'd buy these ASX retail shares if economic fragility starts a fire sale

An economic hiccup could present a golden opportunity to buy these quality retailers.

Read more »