10 Feb 2020
Spending on groceries, toiletries and pharmacy products seems to have peaked in the week ending 20 March, with all categories together having grown 80 per cent year-on-year.
Since then, a slowing of year-on-year growth in groceries and toiletries suggests the average household is either stocked up already or becoming less concerned about supply chain issues for the essentials. While grocery sales are still very elevated, it seems households are adjusting to the “new normal” of social distancing as the Australian government continues to tighten restrictions to combat the COVID-19 crisis.
"The average household is either stocked up already or becoming less concerned about supply chain issues for the essentials.”
Working from home
However, this easing of spending has not yet been seen for electronics. A steep rise in the ANZ-observed demand for electrical retailing (including large appliances and small electronics) suggests some households may be increasing their food storage capacity or upgrading/purchasing equipment to work from home with electrical retailing sales growing 59 per cent year-on-year for the week ending 26 March.
Not dressed up, nowhere to go
Retail categories most impacted by social distancing requirements have dipped dramatically.
Dining out and clothing both dropped 38 per cent year-on-year while footwear and accessories dropped 28 per cent year-on-year, according to ANZ-observed spending for the week ended 26 March.
Spend in these categories has been deteriorating in year-on-year growth terms since the week ending 15 March. Takeaway services spending also saw a smaller decline of 14 per cent year-on-year.
But the spending lost to fashion and dining out seems to have found a new home.
Spending on recreation goods grew 26 per cent year-on-year for the week ending 26 March, while news and books rose 7 per cent. The rise in electronics retailing and department store retailing could also be interpreted as entertainment-related stockpiling such as video games.
Do it yourself
Some householders apparently also see social distancing rules as an opportunity for home improvement with ANZ-observed spend on hardware, building and garden supplies rising 29 per cent year-on-year for the week ended 26 March.
The relatively recent increase in this category may reflect growing concerns households may soon be locked down with no ability to purchase goods for DIY projects around the house.
However, furniture and homewares retailers have not benefitted from this trend seeing only 4 per cent year-on-year growth for the week ending 26 March.
Adelaide Timbrell is Economist and David Plank is Head of Australian Economics at ANZ
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
10 Feb 2020
30 Mar 2020