AAP Finance

Retail trade jumped 16.9 pct in May

By AAP Newswire

Australian retail trade expanded even more in May than originally thought, amid an easing in coronavirus restrictions.

The Australian Bureau of Statistics on Friday released revised figures for the month, showing that retail turnover rose 16.9 per cent to $28.97 billion, rather than its preliminary estimate of 16.3 per cent.

The total retail trade was $28.97 billion, up 5.8 per cent from May 2019 and 4.4 per cent stronger than February, although still about four per cent lower than the record levels in March when consumers stocked up on essentials and home office supplies.

"The gradual easing of social distancing regulations, and the re-opening of physical stores, bolstered retail trade in May," said Ben James, ABS' director of quarterly economy-wide surveys.

The rise follows a slump of 17.7 per cent fall in April due to coronavirus-related restrictions. Retail sales have see-sawed sharply in recent months, jumping by 8.5 per cent in March as households stockpiled goods, before diving in April.

For May, there were big month-on-month jumps in clothing, footwear and personal accessory retailing, which more than doubled.

Spending at cafes and restaurants rose 30.3 per cent, although it was still down almost 35 per cent from a year ago.

Sales of food and household goods rose strongly from already high levels.

"The shift to working from home, along with enhanced temporary welfare payments, continues to support the frenzy in electronic goods retailing, where sales are now tracking 25 per cent above the 2019 level, while household goods have reported a similarly surprising increase," said JP Morgan economist Tom Kennedy.

"Loosening of restrictions, pent-up demand, government income support and some substitution away from spending on services (which was still largely restricted in May) supported turnover," BIS Oxford Economics chief economist Sarah Hunter said in a note.

Online sales contributed 10.1 per cent to retail turnover, down from 11.1 per cent in April, but still significantly higher than the 6.2 per cent in May 2019.

NAB online retail sales data released on Thursday showed online sales dipped one per cent in May, after they soared 16.4 per cent in April.

"Going forward NAB spending data suggests spending has levelled out in June, while new COVID-19 outbreaks in Victoria are likely to weigh on Victorian sales in coming months," NAB economist Kaixin Owyong wrote in a note.