Australian retail turnover rose 1.4% in March 2021, seasonally adjusted, according to preliminary retail trade figures released by the Australian Bureau of Statistics (ABS), which also showed turnover rose 2.3% when compared to March 2020.
“Victoria and Western Australia led the rises, after COVID-19 lockdowns impacted retail sales in February 2021,” said Ben James, Director of Quarterly Economy Wide Surveys. “Queensland saw a small fall, with Greater Brisbane impacted by lockdown restrictions from 29th March.”
NRA CEO, Dominique Lamb, said the results demonstrate the volatile effect that lockdowns continue to play on the economy.
“The preliminary March figures from the ABS are on balance good news but they also highlight the current volatile economic conditions,” Lamb said. “Victoria and Western Australia showed a resurgence in March, no doubt influenced by the pent up demand caused by the hard lockdowns both states had in February. While a short, three-day lockdown in Brisbane at the end of March was enough to plunge Queensland into negative monthly turnover.”
Australian Retailers Association CEO, Paul Zahra, said Australian retail sales remain favourable with the preliminary ABS figures released showing $30.7 billion was spent in stores and online in March – a 2.3% increase compared to the same time last year.
He noted that retail performance is underpinning Australia’s economic recovery, but the full extent of the end of Federal Government support including JobKeeper and JobSeeker is still unclear.
“The retail industry has been resilient throughout COVID, navigating its way through state-imposed lockdowns and restrictions and, despite all the challenges that have been thrown at them, many of these businesses are helping drive Australia’s economic recovery,” said Zahra. “As expected, while we haven’t experienced a fiscal cliff, we have seen a softening of sales as we cycle the panic buying from the beginning of the pandemic. The vaccination rollout is now imperative to boosting consumer confidence and safety.”
Lamb said that with JobKeeper ended, discretionary spending levels slowing and the possibility of further hard-lockdowns not over, it could remain a bumpy ride ahead for retail.
“When Australia came out of the initial lockdown after the pandemic first hit, we saw consumers really splash the cash. But we’re now starting to see discretionary purchases slowly start to taper off from the record-high levels experienced towards the end of 2020,” she said. “With JobKeeper now also over, there remains a degree of uncertainty with business owners knowing they don’t have that safety net if further lockdowns occur or if economic conditions worsen.
“The sector as a whole is tracking well, but there are two cohorts of retail the ARA remains deeply concerned about,” added Zahra. “Travel retailers continue to have their businesses decimated by international border closures, and while the travel bubble with New Zealand is a small relief, we know that global travel patterns aren’t expected to return to normal until 2024.
“While office occupancy rates are slowly improving, helping drive foot traffic through popular CBD shopping strips, the Melbourne and Sydney CBDs are still a concern as a large number of people choose to work from home. This continues to heavily impact CBD retailers and small business operators in particular,” he said.
The ABS report revealed that cafés, restaurants and takeaway food services (6%) led the rises by industry, driven by increases in Victoria and Western Australia. Meanwhile, clothing, footwear and personal accessory retailing and department stores also saw rises led by these two states. Nationally, food retailing saw a fall of 1%.
“There’s still a big question mark over what impact the removal of JobKeeper has had on the economy,” said Zahra. “There were one million people and 370,000 businesses still accessing the scheme in its final month. The ABS job and retail figures that’ll be released in the months ahead will be our first indication as to what the real impact has been.”
According to the ABS, the March quarter is relatively unchanged in current price, seasonally adjusted terms. This follows a rise in the December quarter of 2.5%. Quarterly volume estimates will be included in the final Retail Trade release on May 10, 2021 and the June 2021 release of the Preliminary Retail Trade on 21st July 2021 will be the last release of the Preliminary number.