A promising start for retail as the latest preliminary results for January show Australian retail turnover rose 0.6% in January 2021, seasonally adjusted, according to trade figures released last week by the Australian Bureau of Statistics (ABS). Turnover rose 10.7% when compared to January 2020, which demonstrated another month of strong retail sales.
Ben James, Director of Quarterly Economy Wide Surveys, said, “There continues to be variations in retail sales between states and territories, as COVID-19 restrictions are tightened or eased in different parts of the country. All states and territories rose in January, except Queensland (-1.5%) where a three day lockdown impacted trade. NSW (1.0%) led the rises, as restrictions that began in December were eased during January.”
Food retailing led the rises by industry, as supermarkets recovered from a fall in December 2020. There were falls in clothing, footwear and personal accessory retailing, household goods retailing, and department stores, which all saw impacts from interrupted trade in Queensland.
NRA CEO Dominique Lamb said “The preliminary retail figures for January are promising, showing a solid monthly increase. The first month of the year is generally a bit slow following the Christmas rush, however domestic retail certainly benefited from consumers unable to travel overseas for holidays”.
“Queensland appears to be the only state to have gone backwards in January, no doubt due to the three-day hard lockdown. This underlines the fact that while the possibility of hard lockdowns remain, a degree of business uncertainty will remain”, she said.
“Also, assistance measures such as JobKeeper are due to end in just over month and this will likely reduce discretionary spending. An efficient and successful rollout of the COVID vaccine will be critical to removing the potential for hard lockdowns, providing business certainty and ensuring a timely economic recovery.” said Lamb.
Australian Retailers Association CEO Paul Zahra said while it’s pleasing to see sales strengthen through January, there are pockets of retail at breaking point with the looming end of JobKeeper.
“Retailers had a really strong finish to the year and that’s now continued through to January, however it doesn’t paint a complete picture of what the sector is going through. While the unemployment rate is trending down and house prices are strong – our economic recovery is uneven, and there are still pockets of retail across the country that will suffer when the JobKeeper and JobSeeker schemes wind up”, Zahra said.
According to ARA strategic partner Deloitte, there’ll be close to $5 billion less in government support flowing through the economy each month.
Zahra continued, “Even with the imminent rollout of the vaccines, this uncertainty will continue for some time and we repeat our calls for a nationally consistent approach around Covid restrictions, with clear criteria, so businesses can at least operate with some sort of confidence.”
Final January sales results will be released on 4 March 2021.