We all knew the Australian retail numbers for April 2020 would be bad. The coronavirus pandemic and subsequent economic shutdowns have literally closed thousands of shops and businesses around the country since March. For a few weeks, many Australians weren't allowed to step foot into shopping centres.
But it's always sobering when reality replaces the hypothetical and that's just what has happened today.
This morning, the Australian Bureau of Statistics (ABS) released its official retail data for the month of April and the numbers weren't too good.
A gloomy month for Aussie retail
According to the ABS, Australian retail turnover fell 17.9% in April 2020. That number is seasonally adjusted too and it's the largest fall ever recorded by the ABS. Compared with April 2019, Aussie retail turnover was down 9.4%.
The ABS reports that every single industry reported falls, with food retailing; cafés and restaurants and clothing, footwear and personal accessories sectors hit the hardest. Turnover in these sectors was "around half the level of April 2019."
Particularly of note was food retailing, which fell 17.1% in April following a strong rise in March. It appears consumers have stopped buying/hoarding record amounts of non-perishable food and household essentials that we saw in March when the extent of the coronavirus became apparent.
What do these numbers mean for ASX shares?
Unfortunately, there's not a lot of good news for ASX investors in these numbers. Of course, most of us were expecting extremely dire numbers for April, but seeing them in the flesh isn't a fun exercise, especially for anyone holding shares of retail-exposed companies, especially for shopping centre REITs like Scentre Group (ASX: SCG).
It's not good news for shareholders of Coles Group Ltd (ASX: COL) or Woolworths Group Ltd (ASX: WOW), either. It shows that the panic buying that we saw in March was a 'flash in the pan' kind of scenario, and I don't expect the new trends that we see in April to reverse for Coles and Woolies for the rest of the year.
I would suggest keeping on eye on the figures for May and June (once they're released) for a clearer indication of what the future holds. April's numbers were always going to be bad because consumers legally had to stay at home unless buying essentials. But it's the figures that detail how Australians are shopping when we actually have the freedom of doing so that will really paint the picture of what the rest of 2020 has in store.
