Retail turnover increases 0.6% in January

Australian retail turnover increased 0.6% in January 2021, seasonally adjusted, according to preliminary retail trade figures released today by the Australian Bureau of Statistics (ABS).

Turnover increased 10.7% when compared to January 2020.

Director of Quarterly Economy Wide Surveys Ben James said: “There continues to be variations in retail sales between states and territories, as Covid-19 restrictions are tightened or eased in different parts of the country.

All states and territories increased in January, except Queensland (-1.5%), where a three-day lockdown impacted trade. NSW (1%) led the increases, as restrictions that began in December were eased during January.”

Food retailing led the increases by industry, as supermarkets recovered from a decline in December 2020. There were declines in clothing, footwear and personal accessory retailing, household goods retailing, and department stores, which all saw impacts from interrupted trade in Queensland.

National Retail Association CEO Dominique Lamb said the steady rise in monthly sales indicated good news, but uncertainty remains until the pandemic is over.

“The preliminary retail figures for January are promising, showing a solid monthly increase,” 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 appears to be the only state to have gone backwards in January, no doubt due to the three-day hard lockdown. This underlines the fact that while the possibility of hard lockdowns remain, a degree of business uncertainty will remain.

“Also, assistance measures such as JobKeeper are due to end in just over month and this will likely reduce discretionary spending.

“An efficient and successful 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 it’s pleasing to see sales strengthen through January, there are pockets of retail at breaking point with the looming end of JobKeeper.

“Retailers had a really strong finish to the year and that’s now continued through to January, however it doesn’t paint a complete picture of what the sector is going through,” Mr Zahra said.

“While the unemployment rate is trending down and house prices are strong – our economic recovery is uneven, and there are still pockets of retail across the country that will suffer when the JobKeeper and JobSeeker schemes wind up.

“According to ARA strategic partner Deloitte, there’ll be close to $5 billion less in government support flowing through the economy each month.

“Travel retailers in particular are at breaking point and are preparing to shed thousands of jobs. These are businesses operating within airports and CBD tourist shopping strips which remain largely deserted.

“Some businesses, like duty free shops, have lost 90% of their revenue since the pandemic started. Many cannot afford to hang on any longer.

“International borders are not going to reopen any time soon, and these businesses will have no option but to close unless there’s additional Federal Government support. They are in crisis through no fault of their own.

“Overall, whilst we don’t believe we will face a fiscal cliff, sales are expected to soften throughout the year as we’re continuing to live with the uncertainty of Covid.

“As we’ve seen in Victoria in the past week, new cases can emerge at any time and retailers are operating at the whim of the different Premiers in terms of how they might respond with lockdowns and restrictions.

“Even with the imminent rollout of the vaccines, this uncertainty will continue for some time and we repeat our calls for a nationally consistent approach around Covid restrictions, with clear criteria, so businesses can at least operate with some sort of confidence.”

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