Panic Buying Extends To Supermarket Shares

Shares in Coles, Woolies, and Metcash surged yesterday as investors took heed of the impact of the panic buying will have on sales and earnings for the March quarter at least.

Brokers said the rises for Metcash (26.9%) and Woolies (9.7%) were the strongest since both companies listed on the exchange. Woolworths re-listed on the ASX in 1993 after being unlisted while Metcash appeared around 1994.

Woolworths shares closed at $39.85. Yesterday’s rise was the strongest since 2016 when the company changed CEOs and abandoned its disastrous Master’s hardware adventure.

The rises helped the consumer staples index to rise by 8% yesterday, making it one of the better-performed sectors behind the financials (up 9.2%) and materials (up 9.1% after big rises by mining stocks).

The rises for the trio stood out in yesterday’s surprise about-turn for the market after Monday’s record plunge.

The ASX 200 ended the day up 5.83% or 291 points.

Yesterday’s surge in the price of Woolies shares came on an absence of any news from the companies except announcing a new restocking process and special trading hours for seniors.

Metcash’s swing has been astounding. The shares hit a 14-month low last Thursday at $2.35, but surged yesterday, driving higher through the session to top the $3 mark late in the day.

Coles shares closed up 8.4% at a new all-time high of $17.72. Coles shares also jumped 8.7% last Friday.

Meanwhile, analysis conducted by ANZ Bank of electronic customer payments and spending through its terminals revealed the biggest hit was seen in expenditure on eating out.

“The deepest cut is spending on dining out, with growth in annual terms falling from 6 percent for the week ended February 26 to a decline of 1 percent for the week ended March 4,” said Adelaide Timbrell, an economist at ANZ.

“Travel-related spending and entertainment spending also fell sharply in annual terms in late February and early March. Entertainment was down 20 percent for the week ended March 4, while travel was down around 7 percent,’ she said.

“Annual sales are growing quickly as shoppers engage in panic buying,” Ms. Timbrell said. “Sales skyrocketed from 8 percent for the week ending February 26 to 17 percent for the week ended March 4.”

Is this why Coles, Woolies and Metcash shares surged yesterday?

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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