Retail sales increased 9.1 per cent through the year to February, according to the Australian Bureau of Statistics (ABS), with household goods growing by 18 per cent.
However, sales are expected to slow down with both JobKeeper and JobSeeker coming to an end. Australian Retailers Association (ARA) CEO Paul Zahra says while JobKeeper has been a saviour, keeping businesses afloat through the worst of the pandemic, there are two cohorts of retail that are most at risk now that the wage subsidy is gone.
“The outlook for retail trade remains robust, however, the economic recovery is uneven and not everyone is benefiting from the same levels of spending,” he explains.
“Travel retailers and SMBs in our CBDs continue to suffer and will be hardest hit by the end of JobKeeper coupled with the end of leasing protections.”
Indeed, with some border restrictions still in place and no international travel any time soon, as well as lower office occupation in many city centres, retailers will struggle for some time to come.
“The Covid threat remains alive as we’ve seen with the recent outbreak in Brisbane, which has spread to Northern NSW. Lockdowns and restrictions come at a tremendous cost to retail, and they are counting the cost of lost turnover during one of the busiest times of year with many holiday makers having to cancel their plans.
“Despite the setbacks, most retailers have been resilient through the Covid pandemic and we are hopeful of a solid second half with vaccinations continuing to rollout creating more certainty.”
While February figures are encouraging, sales are expected to soften over the coming months and some sectors will be hit harder than others.
“Some businesses are unfortunately in the process of letting people go which will impact broader consumer spending, as will the reduced JobSeeker payments. Some retailers could see year on year sales soften as a result of the increased levels of panic buying we saw around this time in 2020,” says Zahra.
However, online sales have seen incredible growth, increasing 52.5 per cent through the year to February according to the ABS. New figures were also released this week by Australia Post showing nine million Australian households shopped online in 2020.
“We’ve seen a powerful shift in consumer trends due to Covid and retailers have done an incredible job to boost their online offerings to better meet the needs of consumers and help keep sales moving through lockdowns and restrictions.”