Will CE Retailers In Vic See Another Surge During Round 2 Lockdowns?
While the retail sector as a whole was hit hard by the first round of COVID-19 lockdowns, the country’s major CE retailers witnessed a significant surge in demand, and a number of stores recorded double-digit growth in their online channels. As Victoria goes under lockdown for a second time, stakeholders are wondering whether similar patterns will emerge.
Industry stakeholders have told ChannelNews that while they believe there will be an uptick in CE purchases during Victoria’s new COVID-19 lockdowns, it will likely be weaker the second time around.
The general opinion is that there will be a lift of 10-15% this time around, which would still mark an increase compared to year-on-year averages. The July-to-September period is generally a slower period for CE retailers.
“With many Australians continuing to work from home and adapting to a home office, it’s no surprise to see elevated sales in household goods, recording an increase of 29% year-on-year [in May], while home improvements continue to be popular,” Paul Zahra, CEO of the Australian Retailers Association, said last week.
In the first five months of 2020 JB HI-FI’s sales increased by 20% and The Good Guys were up 23.5%, driven by demand for appliances, office supplies, and home entertainment as consumers were upped their spending on improving the home.
Similarly, Harvey Norman is expecting a pre-tax profit lift of 20% for FY20, following the surge in tech purchases during COVID-19 lockdowns. Harvey Norman Chairman Gerry Harvey told The Australian that the retailer had sold out of every freezer it had in the country.
However, any increased growth in Victoria during the new lockdowns may be restricted to CE retailers. The ABS retail trade figures for May confirmed that overall spending increased following the easing of restrictions.
“Victoria remains a significant cause of concern, with lockdowns in COVID-19 hot spots likely to dampen recovery efforts, with retail sales lagging behind the rest of the country,” Zahra said last week, before Victoria’s full lockdowns were announced.
COVID-19 lockdowns also accelerated the uptake of shopping on online channels. Retailers that have expanded their investment in online retailing will continue to reap the benefits of this transition.
For example, Shaver Shop’s online sales grew by 387% from late March to mid-May, more than offsetting the sales decline across its physical store network.
Wesfarmers, which witnessed strong online growth at Catch, Bunnings, Officeworks, and Kmart, also announced its plans to boost its investments in its online retail platforms.