Retail records steady May sales with lockdown impacts yet to be felt

The Australian Bureau of Statistics (ABS) has confirmed more than $31 billion was spent in stores and online in May – an increase of 0.4 per cent on the previous month and up 7.7 per cent on the same time last year.

Australian Retailers Association CEO Paul Zahra said while retail sales remain on a positive trajectory for now, state-imposed lockdowns are having an impact on spending and confidence.

“It’s pleasing to see retail sales tracking well overall, however we’re yet to see the full impact of the state-imposed lockdowns we’ve seen recently across multiple jurisdictions,” he said.

The ABS figures show retail spending in Victoria fell 0.9 per cent in May as the state entered its fourth lockdown. Queensland and Tasmania led the monthly increases – up 1.6 per cent and 1.5 per cent respectively. 

The next two months of data is set to be a mixed bag across the states with businesses across NSW, Queensland, Western Australia, and the NT impacted by lockdowns and restrictions as new COVID-19 cases emerge in the community.

“There have been over 50 days of state-imposed lockdowns this year alone and it’s small businesses and casual workers that are most severely impacted without a JobKeeper style safety net,” says Zahra.

NRA CEO Dominique Lamb said the May figures were good, but the recent spate of lockdowns showed retail continues to face a volatile period.

“Retailers understand the need to keep the public safe but even short lockdowns can have a massive effect on the economy. While the May ABS figures are very good, we’re likely to see less promising results in June and July.”

The year-on-year results for May were mixed across the major categories of retail.

“When comparing May 2021 to May 2020, spending on food retailing (which includes supermarkets, grocery stores, and liquor retailing) was down 1.2 per cent, household goods was down 5.5 per cent, clothing, footwear and personal accessories was up 46.3 per cent, department stores were down 4.7 per cent, while cafes, restaurants and takeaway food services were up 62.6 per cent,” says Zahra.

“The vast bulk of retail spending continues to be made in stores, with online sales representing 9.1 per cent of total sales in May 2021.”

He says the vaccine rollout is critical to boosting consumer and business confidence and to getting Australia’s COVID recovery back on track.

“The Australian retail community stands ready to support vaccination efforts in any way it can, including by allowing more pharmacies to administer jabs through its vast network of chemists throughout the country.”

Lamb agrees, saying that retailers were pleased to see National Cabinet last week announce a strategy to transition out of the pandemic, including an end to lockdowns.

“While a vaccination threshold that would see lockdowns become a thing of the past is yet to be announced, we do hope the details will be released shortly. A silver lining in the recent round of lockdowns has been a sense of urgency amongst all Australians to get the jab,” she said.

“Businesses of all shapes and sizes require certainty more than anything else. The sooner we get to a more predictable business environment the better placed the country will be to safeguard jobs.”

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