Retail sales increases 0.4% in May

The Australian Bureau of Statistics (ABS) has reported more than $31 billion was spent in stores and online in May in the retail trade figures released today – an increase of 0.4% on the previous month and up 7.7% on the same time last year.

ABS Director of Quarterly Economy Wide Surveys Ben James says: “The main themes from the Retail Trade Preliminary release remain relevant for the Final release. Retail turnover in May was impacted by the Victorian lockdown from May 28 onwards, as well as those states recovering from restrictions in April.”

Food retailing increased 1.1% ($141.4m) in May, in seasonally adjusted terms.

By industry subgroup, the seasonally adjusted estimate increased 1.9% ($188.8m) for supermarket and grocery stores, declined 2% (-$25.1m) for liquor retailing, and declined 2.5% (-$22.3m) for other specialised food retailing.

Café, restaurants and takeaway food services rose 0.7% ($29.8m) in May, in seasonally adjusted terms.

By industry subgroup, the seasonally adjusted estimate increased 1.8% ($41.1m) for cafes, restaurants and catering services, and declined 0.6% (-$11.3m) for takeaway food services.

Retail faces volatile period

National Retail Association CEO Dominique Lamb says the figures were good but the recent spate of lockdowns showed retail continues to face a volatile period.

“The May results are very good for retail, with a strong increase on the April results which is also promising when you consider the month is generally a quiet one for the sector,” she says.

“It shows that when the economy is relatively open that business is going well, but as the recent spate of state lockdowns has shown there remains uncertainty.

“Retailers understand the need to keep the public safe but even short lockdowns can have a massive effect on the economy. While the May ABS figures are very good, we’re likely to see less promising results in June and July.”

Ms Lamb says that retailers were pleased to see National Cabinet last week announce a strategy to transition out of the pandemic, including an end to lockdowns.

“Retailers were pleased to see National Cabinet turn its attention to transitioning out of the pandemic and bringing an end to costly lockdowns,” she says.

“While a vaccination threshold that would see lockdowns become a thing of the past is yet to be announced, we do hope the details will be released shortly. A silver lining in the recent round of lockdowns has been a sense of urgency amongst all Australians to get the jab.

“Businesses of all shapes and sizes require certainty more than anything else. The sooner we get to a more predictable business environment the better placed the country will be to safeguard jobs.”

Covid impacts are set to curtail spending in the months ahead

Australian Retailers Association CEO Paul Zahra says whilst retail sales remain on a positive trajectory for now, state-imposed lockdowns are having an impact on spending and confidence.

“It’s pleasing to see retail sales tracking well overall, however we’re yet to see the full impact of the state-imposed lockdowns we’ve seen recently across multiple jurisdictions,” he says.

“The ABS figures released today show retail spending in Victoria fell 0.9% in May as the state entered its fourth lockdown. Queensland and Tasmania led the monthly increases – up 1.6% and 1.5% respectively.

“The next two months of data is set to be a mixed bag across the states with businesses across NSW, Queensland, Western Australia and the NT impacted by lockdowns and restrictions as new Covid cases emerged in the community.

“There have been over 50 days of state-imposed lockdowns this year alone and it’s small businesses and casual workers that are most severely impacted without a JobKeeper style safety net.”

Mr Zahra says the year-on-year results for May were mixed across the major categories of retail.

“When comparing May 2021 to May 2020, spending on food retailing (which includes supermarkets, grocery stores, and liquor retailing) was down 1.2%, household goods was down 5.5%, clothing, footwear and personal accessories was up 46.3%, department stores were down 4.7%, while cafes, restaurants and takeaway food services were up 62.6%,” he says.

“The vast bulk of retail spending continues to be made in stores, with online sales representing 9.1% of total sales in May 2021.”

Mr Zahra says the vaccine rollout is critical to boosting consumer and business confidence and to getting Australia’s Covid recovery back on track.

“Vaccinations are our best weapon to fight the virus and to ensure we avoid Covid lockdowns and restrictions from occurring in the future,” he says.

“The Australian retail community stands ready to support vaccination efforts in any way it can, including by allowing more pharmacies to administer jabs through its vast network of chemists throughout the country.”

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