Panic buying at Australian grocery stores pushed up retail sales in February, although that is unlikely to ease the chances of a recession as the coronavirus pandemic forced the government to widen its ban on travel and social gatherings.
Preliminary data from the Australian Bureau of Statistics (ABS) on Wednesday showed the rise of 0.4% in retail sales, which followed declines in December and January, was largely driven by food retailing, which accounts for 40% of total trade.
A mad rush to stores by panicked shoppers as coronavirus news fanned fears of shortages of essential items has led to earnings upgrades for Australian grocers such as Woolworth and Coles. But discretionary spending - a more accurate gauge of consumer confidence - remained in the doldrums with clothing, footwear and personal accessory down while duty-free stores and luxury goods retailers reported declines in February.
"Since retail trade only accounts for about 30% of total household consumption, front-loading purchases is unlikely to offset lower spending elsewhere. Therefore, we still expect a negative Q1 GDP print," Citi economist Josh Williamson wrote in a note.