Stockpiling drives grocery spending by £60m as sales of new cars collapse
CONSUMERS in the north spent an extra £60 million at supermarket checkouts in the last three months, new industry data suggests.
But the traditional barometer of consumer confidence, new car sales, is expected to collapse in the month of April following the widespread closure of car showrooms due to coronavirus.
With dealerships shutting mid-way through March, new car registrations fell 56 per cent in Northern Ireland last month, according to the Society of Motor Manufacturers and Traders (SMMT).
The decline will almost certainly be much deeper for the month of April.
The impact of the Covid-19 was also clear on the north's grocery market, with stockpiling driving spending.
Supermarket monitor Kantar said £800m was spent in Northern Ireland supermarkets in the 12 weeks ending March 22 2020, some £60m up on the same period last year.
Sales of high demand products rocketed over the three months. Sales of hand soap were up 60 per cent, while facial tissues and toilet roll grew by 37 per cent and 30 per cent respectively
Household cleaners were also up by almost a third.
Tesco's share of north's grocery market increased by 0.4 percentage points to 35.6 per cent, while Lidl posted the strongest increase in sales. Shoppers spent 7.7 per cent more in the German retail chain, driven by more frequent trips and slightly higher prices.
Sainsbury's also pulled further ahead of Asda as the second most dominant multiple. Kantar's analysis found that the value of sales within the Walmart-owned multiple fell 1.9 per-cent year-on-year.
Ulster Bank's chief economist Richard Ramsey said the new car sales data from the SMMT has traditionally been the go-to statistic for measuring the strength of consumer spending.
While the shock of Covid-19 is clearly evident, he said that Northern Ireland car dealers had posted their worst January and February in at least 25 years prior to the pandemic.
“The pandemic has accelerated this decline to a pace not witnessed in Northern Ireland previously.”
The 56 per cent fall was well above the UK average decline of 44 per cent. It left the first quarter of 2020 as the lowest for new car sales since the fourth quarter of 2008.
“April will undoubtedly see even greater declines with the lockdown expected to be in force for the entire month and beyond,” said the economist.
“We can get an idea of the scale of declines under a full lockdown by looking at France and Italy. The latter introduced its lockdown on March 9 with new car sales plunging 85 per cent year-on-year last month.
“France's lockdown came later than Italy's and its' motor industry recorded a 72 per cent year-on-year decline in new car sales in March.
“All economies, Northern Ireland included, will do well to record any sales whatsoever in April,” added Mr Ramsey.
“Other sectors such as the hospitality industry have witnessed similar declines in sales activity with deeper falls to come in April and beyond.”