While retail seems to be on a path of recovery as Australian turnover rose 0.6 per cent in January 2021 and January spending rose by 10.7 per cent compared to January 2020, these figures don’t tell the whole story.
Ben James, director of Quarterly Economy Wide Surveys says there continue 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 rose in January, except Queensland (-1.5 per cent), where a three-day lockdown impacted trade. NSW (one per cent) led the rises, as restrictions that began in December were eased during January."
Australian Retailers Association CEO Paul Zahra echoes this sentiment and says 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,” he explains.
“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.
“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,” he says.
NRA CEO Dominique Lamb adds the steady rise in monthly sales indicated good news, but uncertainty remains until the pandemic is over.
“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.”