Victoria drags down nation in retail sales, as lockdown impact remains

ABS Preliminary Retail Trade Figures for August reveal the severe impact of stage-four restrictions in Victoria, with the state holding back a national recovery, the Australian Retailers Association (ARA) said today.

The ABS data released today indicates a 4.2% fall in retail turnover from July to August 2020, while recording year-on-year growth of 6.9% compared to August 2019.

ARA CEO Paul Zahra said that restrictions in Victoria has slowed the recovery that began to materialise around the country, with the state recording a further decrease of 12.6% compared to the previous month.

“We have seen some promising signs of recovery on a national level, but we are mindful that consumer spending remains elevated due to government stimulus measures. These figures confirm our concern that the impact of Victorian lockdowns will be felt beyond state borders, with the sales in the rest of Australia falling 1.5% compared to the previous month.

“Strong year-on-year growth remains underpinned by sales in household goods, though the impacts of staying, playing and working at home could be easing as sales begin to taper off in the category.

“The ongoing viability of some of our hardest hit retailers remains under threat – those in CBD locations and discretionary retailers – as the clothing, footwear, and personal accessories category recorded a continued sales fall.

Mr Zahra said the figures underlined the urgent need for the Victorian Government to reassess the restrictions, which have caused a catastrophic impact despite retailers’ commitment to the safety of all Victorians.

“We would like to see a much earlier reopening and believe an approach similar to the successful NSW example is a much more reasonable alternative. The current lockdowns are globally unprecedented and untenable,” he said.

Mr Zahra said that to ensure the viability of the sector, the ARA had recommended the Victorian government immediately increase capacity in warehouse and distribution staffing given the significant impact that this was having on customer orders and the national supply chain, and reassess the thresholds to bring forward the easing of restrictions.

“The coming months are going to be quite telling. We anticipate overall Sales in September will continue to be dragged down by the Victorian lockdown, but buoyed by the continued, albeit tapered, JobKeeper and JobSeeker support.

“The final quarter of 2020 will be crucial for many stores fighting for their future, with the Christmas shopping period a make or break time for many. It will be a shopping period like no other, and have a lasting impact to shape the future of Australia’s retail industry,” Mr Zahra concluded.

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