Retail recovery remains uneven despite increase in January trade

Australian retail sales increased 10.7% in January, compared to the same time last year, according to preliminary data released today by the Australian Bureau of Statistics (ABS).

Australian Retailers Association CEO Paul Zahra said 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,” Mr Zahra said.

“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.

“Travel retailers in particular are at breaking point and are preparing to shed thousands of jobs. These are businesses operating within airports and CBD tourist shopping strips which remain largely deserted.

“Some businesses, like duty free shops, have lost 90% of their revenue since the pandemic started. Many cannot afford to hang on any longer.

“International borders are not going to reopen any time soon, and these businesses will have no option but to close unless there’s additional Federal Government support. They are in crisis through no fault of their own.

“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.

“Even with the imminent rollout of the vaccines, this uncertainty will continue for some time and we repeat our calls for a nationally consistent approach around Covid restrictions, with clear criteria, so businesses can at least operate with some sort of confidence.”

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