Wednesday, April 24, 2024

Retail leads Covid-recovery with April sales boom

The Australian retail sector is leading the charge in the nation’s recovery from the Covid-pandemic with an April sales boom.

Data released today by the Australian Bureau of Statistics (ABS) reveals that nationwide retail sales grew by 1.1. per cent in the month of April. The figures also come off the back of ABS data showing that GDP grew by 1.8 per cent for the March quarter.

National Retail Association CEO Dominique Lamb said the ABS April data demonstrated how crucial the retail sector was to Australia’s economic recovery.

“Retail sales boomed nationwide in April, with the Australian economy now bigger than it was before the bushfires and Covid double-whammy,” Ms Lamb said.

“April was the first month after the expiration of JobKeeper and the Coronavirus Supplement, so the strong consumer spending levels are cause for optimism.

“Retail remains absolutely crucial to Australia charting a successful recovery between now and when the pandemic finally ends. If consumers are spending money at the shops, it’s a good indicator that the economy is ticking along nicely.”

Ms Lamb did warn however that the current situation in Victoria demonstrates that challenges remain.

“The extended Victorian lockdown has thousands of jobs hanging in the balance. If similar restrictions are emulated in other states then it would put a major handbrake on Australia’s Covid-recovery,” Ms Lamb said.

“Governments at all levels still need to be prepared to offer assistance in the event of prolonged lockdowns. The last thing we want to do is hamper Australia’s strong revival from the country’s first recession in 30 years.”

Spending up on pre-pandemic levels

Australian Retailers Association CEO Paul Zahra said data comparison of two years ago paint a more accurate picture of consumer spending, given businesses were plunged into lockdown around April 2020.

When compared to April 2019 – the year before Covid hit – retail sales are up 13.6% according to the ABS.

“Retail sales are well up on pre-pandemic levels, which is an encouraging sign for how the industry is performing with buoyant levels of spending across the different categories of retail,” Mr Zahra said.

“With people not able to travel overseas, more money is being spent on goods and services in Australia which is a key driver of the buoyant figures we’ve seen today.

“Given Australia’s economy essentially grinded to a halt in April 2020 when Covid hit, a comparison to April 2019 provides a more accurate reflection of spending habits.

“When comparing April 2021 to April 2019, spending on food retailing is up 10%, household goods is up 24%, clothing footwear and personal accessories is up 18.8%, cafes, restaurants and takeaways are up 6.1% and department stores are up 7.6%.

“While today’s results show overall retail trade in a healthy position, some retailers continue to struggle and we know that consumer confidence can be shattered very quickly when Covid restrictions and lockdowns are introduced.

“The latest outbreak in Victoria will put a handbrake on spending and is likely to create over $2 billion in terms of lost retail trade.

“CBD retailers, particularly small businesses, along with travel retailers are an ongoing concern. They continue to suffer through the absence of international students, tourists, and city office workers who are spending more time working from home.

“While retail is helping to drive Australia’s economic recovery, the virus is an ongoing threat and confidence levels and spending can change at the drop of the hat when new cases emerge in the community.”

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