June retail sales slowdown reflects lockdown impact

Wednesday 4 August 2021

Final figures released today by the Australian Bureau of Statistics confirm a 1.8% fall in retail sales in June compared to the previous month, though sales remain positive compared to June 2020 (+2.9%), with the results impacted by protracted lockdowns in Victoria and Greater Sydney.

Australian Retailers Association CEO Paul Zahra said month on month sales in Victoria fell 5.0% and dropped 2.0% in NSW, given the Covid restrictions that were imposed in Australia’s two largest states which threaten the viability of many small businesses.

While sound month-on-month performance was recorded in supermarkets and grocery stores (+1.5%), discretionary spending categories were the most impacted by the restrictions and showed the greatest month on month slowdown including clothing, footwear and personal accessories (-9.5%), department stores (-7.0%) and cafes, restaurants and takeaway food (-6.0%).

“Today’s figures are another sign of the pressures caused by recurring lockdowns, underlining the clear need to reinstate comprehensive support measures across the country as many businesses suffer without an adequate safety net in place.

“The June figures are just the tip of the iceberg, as they don’t yet reveal the blow caused by lockdowns in Victoria, WA and SA in July, current Southeast Queensland restrictions, or the prolonged Greater Sydney lockdown. We also know that certain categories of retail performs better than others under lockdowns, and discretionary spending is likely to take a significant hit across this time.

“The Delta variant has so far put around $12bn of retail trade at risk, with a billion dollars at risk each week in Greater Sydney alone.

“While existing Federal and state government support is welcome, it isn’t enough to stem the losses for many businesses, especially small retailers. We urgently need to see increased financial support and the reintroduction of tried and tested measures such as rent relief through the Leasing Code of Conduct, and temporary industrial relations flexibilities in the Fair Work Act to help keep staff on and kick start a business after shutdowns.

“National protocols for Covid restrictions are critical, with lockdowns an ongoing risk for the foreseeable future until vaccination levels increase. Battle weary retailers, who find themselves at the brink of emotional and financial collapse, need certainty.

“Without adequate support after lockdowns are lifted, it is unlikely that businesses will snap back as they have previously and we fear the worst is still to come,” said Mr Zahra.

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