Retail sales figures are key for tracking people returning to shopping following COVID-19.
With most of the world moving towards reopening, we would expect retail sales to increase substantially if we are to have a U-shaped recovery.
So far major retailers reporting in the world’s economy show that sales bottomed out around the middle of April, and have been increasing substantially each week since.
Major non-essential retailers such as Kohl’s and Dixie Group in the US reported recently that sales have been increasing, and expect to be back to normal levels by the end of the quarter. Are those trends repeating in other countries?
New Zealand is Giving us Stale Data
First to report in the wee hours of the morning is New Zealand.
Expectations are for quarterly retail sales to come in at 1.0% compared to 3.3% prior. However, this is data corresponding for the first three months of the year, before New Zealand had major restrictions on movement.
The data is likely going to reflect the “before” scenario, and not have all that much of an impact on the markets.
As recently as Monday, the RBNZ’s Governor Orr said he was still open to the idea of negative rates, even if he didn’t want them “now”. A lack in the pickup of sales might incline the bank in that direction.
Also, on Monday, we saw an uptick in food prices, which might be the first sign of inflation.
UK Remains Behind the Curve
So far, UK companies have not reported a significant increase in trading in May, let alone in April.
The figures we are about to get likely show the bottom of the downward curve in consumer spending.
Early yesterday, inflation was reported to have slowed significantly. And before that, FinMin Sunak warned that a quick bounce-back was not guaranteed.
The UK is Giving us Up-to-Date Information
Expectations are for April retail sales to have dropped -16.0% compared to -5.1% in the prior month.
On an annualized basis, analysts expect them to go down -22.0% compared to -4.1% in the prior reading. That would be the worst performance since there have been records (presumably sales dropped more during the Blitz).
The drop isn’t so significant when considering retail sales excluding fuel. But, again, there was a significant drop in petrol consumption during April.
Expectations are for the monthly change in retail ex-fuel sales to come in at -15.0% compared to -3.7% in March.
Canada is Catching Up
We’d expect to see a larger drop in Canada’s retail sales, because infection spread there later than in other countries.
On Monday it was reported that the BOC will likely start buying corporate debt before the end of the month.
Subsidies for wages affected by the outbreak were recently extended to August. The market pays the most attention to the monthly retail sales figure.
Projections are for this is to show a major drop of -10.0% compared to growth of 0.3% in March. Excluding auto sales, it’s expected at -5.0% compared to flat in the prior month.