Australians appear to be a hungry bunch – at least that’s one possible interpretation of the latest ABS retail sales figures which showed food retailing led a very modest uptick in sales in May.

Even in Victoria – where recent lockdowns saw declines in almost every retail category – food sales climbed 4%, with supermarket sales particularly strong as a result.

While the ABS is yet to publish a breakdown of supermarket spending for the month, the most recent available data (March) painted an interesting picture – non-food items such as cleaning products and medicinal goods appear to be in higher demand than fresh fruit and meat, and canned goods.

In the year ending March 2021, sales of these ‘non-food’ items climbed 3.8%, compared to only 3% for fresh food and 0.6% for non-perishables.

Maybe we’re all overstocked after last year’s panic buying, or perhaps the thought of Spam on toast in the morning is losing its appeal in this smashed avocado aeon – but that’s a question for an economist with ample spare time.

Moving on to markets. The ASX 200 (ASX: XJO) saw a small drop today, easing back 42.1 points (0.57%) with financials and energy stocks dragging the index down.

By lunch, the major banks alone had collectively taken 18 points off the index.

The XJO has a resistance level forming around 7340 with the next resistance around 7390. With today’s price action the market has pulled back to a major support/resistance level at 7300, closing on this level. 

Between the 4th and the 10th of June 2021, the market spent 5 consecutive trading days trying to break through this resistance level. Since breaking through the market has been swinging around 7300 and we suspect there is some more interesting price action on the horizon but technically the market continues to look bullish.

The declines were a little smaller in the smaller end of the market, with the ASX Small Ordinaries index (ASX: XSO) dropping back 0.25%, with homewares retailer Adairs (ASX: ADH) leading the downward spiral with a fall of more than 10%.

The company’s sharp drop followed the release of a note from analysts at Ord Minnett cutting the company’s price target.

Those losses were offset in part by gains made by XSO mining names, including Pilbara Minerals (ASX: PLS), Red 5 (ASX: RED), Champion Iron (ASX: CIA), Chalice Mining (ASX: CHN), and Bellevue Gold (ASX: BGL).

All five miners gained between 2.76% and 5.11%.

Looking to the week ahead, I think all eyes will be on New South Wales and the newly-formed COVID clusters springing up around the state – it will be interesting to see how it all plays out. 

It’s a scene I’m all too familiar with as a Melburnian, and I wish our NSW-based readers luck as restrictions ramp up – we’re rooting for you.