Tomorrow, we will be getting retail sales data from Australia and the EU.
The figures will likely point to an increase in consumer spending. This is as a result of the general public stocking up on food and other basic necessities in preparation for the possible prolonging of the lockdown period.
Aussie retail sales consist of monthly and quarterly estimates of turnover and volumes, for retail businesses. This includes both store and online sales.
EU retail sales will have a relatively muted impact. This is because Germany and France, which account for about half of the eurozone’s economy, released their consumer data earlier.
Australia: Surge in Consumer Spending
Australia had its preliminary release of the retail sales data on the 18th of March, 2020.
The Australian Bureau of Statistics (ABS) reported in the first-ever preliminary report that revenues rose by 0.4%, in February 2020.
The seasonally adjusted estimate, on the other hand, also rose by 0.4% in February 2020. This increase in numbers is attributed to COVID-19 panic buying at supermarkets and grocery stores.
Meanwhile, other retail sectors saw declines in consumer spending. The clothing, footwear, and personal accessory retailing sub-industry showed weaker sales due to COVID-19.
Other retail sectors that showed weakness were mainly based on tourism. Duty-free stores and luxury goods that heavily rely on tourists, understandably suffered.
That said, businesses that were not related to tourism remained largely unaffected.
COVID-19 Fear Drives EU Retails
Like Australia, the EU, and Germany in particular, are experiencing a boom when it comes to consumer spending in March.
German retail sales earlier this week suggested that Germans had been stockpiling far ahead of the lockdown measures. The retail data showed a far better than expected jump in March to 1.2%. This is compared to economists projections of 0.1%.
Sales surged all across the board. Supermarkets showed the strongest growth as consumers stocked up on food, tobacco and drinks. We also saw growth in non-food items as the pandemic has changed the way of life.
With other EU nations also recording stronger growth, we can expect the numbers on Friday to beat expectations with a wider margin.
However, the numbers moving forward are likely to change.
The fear-driven panic shopping is natural given the present situation. But, if the lockdown period is prolonged, or the pandemic is not contained soon, it could become a question of survival for most.
With a recession looming and unemployment set to rise tenfold, the shopping pattern we’re seeing can change to the acquisition of just the bare necessities. That also means the other retail sectors would likely take a much heavier hit.
Normally, a rise in consumer spending on the back of weaker spending earlier would be a welcome notion. However, the current trend doesn’t mean we will start seeing growth in consumer spending moving forward.