Oz Retail Surged Over Christmas Despite COVID
Australian retail sales defied the pandemic over Christmas, increasing almost 10 per cent year-on-year over the previous December.
While turnover fell 4.2 per cent from November to December in statistics released by ABS, the 9.4 per cent rise to a seasonally-adjusted figure of approximately $30.3 billion compared to December 2019 represents good momentum for the Australian retail sector, according to Paul Zahra, CEO of the Australian Retailers Association.
“This is a fantastic result that’s allowed retailers to recoup some of the losses they incurred during the worst of the COVID lockdowns and restrictions in 2020, and it sets them up for a more prosperous 2021.
“It’s also pleasing, given in-store traffic down was down in CBD shopping centres due to the threat of the virus. That was particularly the case in NSW after the outbreak on the Northern Beaches, which forced people to shop locally or online,” he said.
Confidence in the retail industry increased almost 70 per cent from October to December, according to Roy Morgan research, and Australia Post delivered more than 52 million parcels in December 2020 – the biggest month in the mail carrier’s history.
Zahra has warned retailers not to get complacent, however.
“The threat of the virus remains, and even when the vaccine is rolled out we’re going to be living with COVID for some time, so some of the existing challenges will remain for retailers.
“We look forward to seeing the final ABS figures for December, and the full breakdown of the spending categories in a couple of weeks,” he said.
Speaking to 3AW’s Ross and Russel this morning, Zahra said that while industries such as hospitality and tourism have suffered, others have thrived during the pandemic.
“The winners clearly have been anything to do with the home, as we’ve had to work, play and stay at home. That’s been anything from hardware right through to pets.
“If your strategy, take a department store, is to have flagship locations in CBD spots… you’d be under great pain,” he said.
Citi has forecast 20 per cent growth in market earnings per share for Australian retail in 2020-21, the best ever earnings in the profit season for the sector; this followed a 15.8 per cent contraction in 2019-20.