Sunday, April 14, 2024

Retail recovery strengthens

Australian retail has made a solid start to the New Year according to the January trade report released on 4 March by the Australian Bureau of Statistics (ABS).

National turnover increased by 0.5% for the month, while January spending rose by 10.6% compared to January 2020.

National Retail Association CEO Dominique Lamb said there were rises across each state and territory, except for Queensland which experienced a three-day hard lockdown in January.

“Following yesterday’s better than expected GDP figures for the December quarter, retail had a solid start to 2021,” Ms Lamb said.

“The first month of the year is generally a bit slow following the Christmas rush, however domestic retail certainly benefited from consumers unable to travel overseas for holidays.

“Queensland was the only state to go backwards in January, due almost entirely to the snap three-day lockdown during the month. The February data will reveal if Western Australia and Victoria experience a similar reduction in economic activity following their hard-lockdowns.

“This is why a swift and safe rollout of the Covid vaccine is essential. Even short, sharp and successful lockdowns can have a material impact on the economy.

“An efficient rollout of the Covid vaccine will be critical to removing the potential for hard lockdowns, providing business certainty and ensuring a timely economic recovery.”

Australian Retailers Association CEO Paul Zahra said while the results are pleasing, the gains are not shared across all categories of retail and some businesses are facing an uncertain future with the looming end of JobKeeper.

“There’s no doubt retail sales have performed incredibly well in recent months, and the National Accounts released yesterday further demonstrate how the economy is bouncing back from the pandemic,” Mr Zahra said.

“But the positive results are not shared across all categories of retail and the travel sector in particular is continuing to feel pandemic pain. Retailers like those at airports and in CBD locations are suffering and face an uncertain future when the JobKeeker scheme winds up at the end of the month. We continue to advocate strongly to the Federal Government for ongoing targeted support for these deeply affected businesses.

“Some travel retailers have lost 90% of their revenue since the pandemic started which means they are forced to shed thousands of jobs. Their pain will be felt for many more months as long as international borders are closed and without a national roadmap for the easing of restrictions and consistency around domestic border closures.”

The ABS figures released on 4 March show year on year increases for household goods (up $902 million or 20%), clothing, footwear and personal accessories (up $168 million or 8%), department stores (up $119 million or 8%) and food retailing (up $1.2 billion or 11%). Online sales continue to skyrocket and are up 63% compared to January 2020.

“It is encouraging to see the returning strength of some of the discretionary categories of spending, which were heavily impacted by lockdowns in 2020,” Mr Zahra said.

“While retail spending overall is tracking well, this data doesn’t paint a complete picture of what the sector is going through – and without ongoing targeted support for businesses that are still struggling, our economic recovery will leave some people behind.”

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