Thursday, May 19, 2022

December spending up, but not for long

Australian retail sales in December improved on the previous year as consumers took advantage of eased Covid restrictions, according to Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment.

Retail sales across the country increased 4.6% in December compared to the same time the previous year and are up 10.4% on pre-pandemic levels in 2019. Food retailing was up 1.2 % on last year and up 9.8% on December 2019.

All states and territories recorded an increase in overall sales in December compared to the previous year, with Victoria and Tasmania leading the way, both up 8.5%.

However, Australian Retailers Association CEO Paul Zahra says sales are likely to be impacted in the new year with Omicron causing significant disruptions.

Omicron set to hit January spending

“The new year has delivered new challenges for retailers in the form of Omicron with tens of thousands of people being forced into isolation every day, and that’s taking a huge toll on the industry – and small businesses in particular, where just a few absences can wipe out an entire store’s workforce,” Mr Zahra says.

“Whilst Christmas and holiday spending has held up well in December, and improved on last year, we had yet to reach the peak of Omicron and consumers were feeling more confident while going about their shopping. The trading environment has changed significantly this month with positive Covid cases and staff shortages resulting in some businesses having to limit their trading hours or close stores altogether.”

Support packages needed

Mr Zahra would like to see the easing of close contact isolation requirements for essential food distributors expanded to broader retail to help with the staffing shortfall.

“Allowing foreign students to work extra hours is a positive step, along with visa fee rebates, but we need to get more people back to work sooner where it is safe to do so,” he says.

“The Omicron impacts are set to be ongoing and targeted support packages need to be considered by governments to assist small businesses through this latest challenge.”

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