Retail sales are still going strong for 2021, with $30.7 billion spent in stores and online in March, according to the Australian Bureau of Statistics (ABS).
However, retail sales volumes for the March 2021 quarter fell by 0.5 per cent as shoppers cut back on discretionary purchases and return to pre-pandemic spending patterns.
“The quarterly volume fall was driven by households spending patterns gradually returning to those seen before Covid-19,” Ben James, director of Quarterly Economy Wide Surveys, says.
“Food retailing (-2.7 per cent) led the falls while household goods also fell (-1.6 per cent). The falls were partially offset by a rise in cafes, restaurants and takeaways (5.8 per cent), as eating out increased, while functions and events continued to return.”
Australian Retailers Association (ARA) CEO Paul Zahra says while year on year sales growth is still positive, it’s significantly lower than previous months, driven by a decrease in supermarkets which are cycling the panic buying period from last year.
“Household goods were up $518 million or 10 per cent, clothing, footwear and personal accessories were up $880 million or 54 per cent, department stores were up $368 million or 25 per cent and cafes, restaurants and takeaway food services were up $1 billion or 33 per cent.
“Australians continue to embrace online shopping with sales up 37.4 per cent in March compared to the same time last year.”
Indeed, online sales made up 9.4 per cent of total retail sales in March 2021 and contributed to 7.1 per cent of total retail sales in March 2020.
According to National Retail Association (NRA) CEO Dominique Lamb the March figures demonstrate that it is still a volatile time for retailers.
“The 12 months to March 2021 has undoubtedly been the most turbulent period retail has experienced in living memory,” she says.
“Panic-buying, lockdowns, supply chain disruptions and myriad other challenges has at times seen retail sales go wildly from one extreme to the other. But we’re now starting to see shoppers slowly return to their pre-pandemic shopping habits.
“Lockdowns continue to have a material effect on retail sales. Both Victoria and Western Australia surged in March following February lockdowns in both states, while the three-day Brisbane lockdown plunged Queensland into negative turnover for the month.”
Lamb says that while it was always expected that spending levels would begin to taper off, she hopes to see measures in tonight’s Budget that will keep consumer spending on track.
“Extending the tax offset for low and middle income earners for a further 12 months will help to encourage consumer spending. While we also hope to see initiatives that help small business and encourage economic activity.
“Maintaining a strong level of demand will be crucial to ensuring a quick economic recovery and help to safeguard jobs in Australia’s second-largest workforce.”
