Monday, June 17, 2024

Second wave threatens recovery

The second spike in COVID-19 cases that has hit Victoria, is threatening to cut any recovery short, and raises questions about how many of Australia’s affected industries will be able to survive the second lockdown.

This concern is being shown in the data from Zip’s Weekly Spending Index.

Throughout June the economic picture was looking very positive. Data from the Index shows that spending was up across key segments like home and renovation by 145%; electronics 73%; construction 53%; department stores 27%; and groceries 24%.

Recovery however hasn’t been uniform as some Australian habits haven’t changed despite lockdown measures being reversed, and strongly signal ongoing behavioural changes in Australia.

“Australia’s businesses showed during June that we were on the way to recovering, but questions remain as to whether they have created a strong enough buffer during the month to help get through a potential second-wave of nationwide lockdowns throughout July,” says co-founder and COO of Zip, Peter Gray.

“For businesses to continue to thrive, owners need to ensure that they’re offering their customers payment choice and the options their customers are demanding.”

Key findings include:  

  • Retail spending using buy now, pay later was at its highest rate in 2020, both online and instore, and was significantly up month on month in all states (bar ACT), all age groups and genders. More here.
  • Restaurants and cafes had all but recovered to pre-COVID levels, and, while pubs and bars were making progress, takings were still down a third compared to last year. More here.
  • Spending on gyms and fitness saw a significant recovery after reopening in June. The numbers started the month at -76% compared to the same time last year, but ended at -19%. More here.
  • Construction industry saw a bump (+54%) which coincided with the beginning of the Government’s HomeBuilder scheme. More here.
  • As limits on the number of people allowed in single residences were lifted, we also witnessed a rise in bottle shop spending. June also saw increased spend on dating websites. More here.
  • Cash is yet to bounce back as ATM withdrawals remain down (-20%), and purchases over online marketplaces continue to climb. (112%). More here.
  • Commuters are not rushing back to public transport. Spending on public transport (-45%), taxis are down (-44%); bike shops are still peddling on (110%). More here.

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