Many Aussie Retailers Facing Last Christmas Ever, Deloitte Warns
Deloitte Access Economics is warning early 2021 will see an influx of retailers as going bust as the industry struggles to keep afloat after the pandemic.
Deloitte partner David Rumbens told The Financial Review even though confidence in the economy is improving after lockdown restrictions eased, there will likely be a ‘catch up’ in the number of retailers collapsing as the JobKeeper safety net gives way.
Rumbens said the government stimulus programs artificially propped up retailers which would have gone insolvent during COVID-19 and 2021 will open the floodgates as the packages wind up.
This could mean 2020 may be the last Christmas many retailers will see, particularly if sales aren’t enough to offset the lack of stimulus cashflow.
“For businesses facing significant disruption to operating conditions, who relied on stimulus measures that are slowly fading and who haven’t made necessary structural adjustments, there is a risk that a poor sales performance could be the straw that breaks the camel’s back,” Rumbens said.
Rumbens warns that while hardware, electronics and furniture retailers will reap the fruits of a busy Christmas season, the clothing, café and department store segments will face collapse in 2021.
If these segments have a below-average Christmas trading season, Rumbens said there is a risk “it could be time to close up shop in the new year as headwinds start to weigh on spending in 2021”.