Australian retail turnover fell 1.5% in September 2020 compared to August, seasonally adjusted, according to preliminary retail trade figures released yesterday by the Australian Bureau of Statistics (ABS). Turnover rose 5.2% when compared to September 2019, which shows a promising result. This result sets the stage for Christmas as restrictions are eased and retail in Victoria reopens.
It follows a year in which retail sales have fluctuated wildly on a month-to-month basis following bouts of panic-buying, lockdown measures and stimulus packages that have boosted discretionary spending. The unpredictability of the sector given the many external factors at play will be a ‘wait and see’ approach for retailers and shopping centres.
“Food retailing, household goods retailing, and other retailing (which includes online only retailers) recorded falls this month. These industries have recorded elevated levels of turnover during the COVID-19 pandemic and continue to trade above the levels of September 2019.” said Ben James, Director of Quarterly Economy Wide Surveys.
Clothing, footwear and personal accessory retailing also fell in September 2020. The falls were slightly offset by rises in department stores, and cafés, restaurants and takeaway food services, which recorded rises after significant falls in August 2020.
All states and territories, except for the Northern Territory, fell this month. Following a large fall in August, Victoria recorded a small monthly fall in September. Victoria remains the only state or territory to be trading below the level of September 2019.
ARA CEO Paul Zahra said the ABS preliminary retail trade figures can be interpreted with a sense of optimism for the all-important Christmas trading period.
“The figures show back to back drops in August and September. We interpret this as an adjustment or normalisation to the trend, which if you strip out the volatility of the past few months, has been quite strong,” Zahra said.
He continued “Australian retailers make up to two-thirds of their profits during the Christmas period, and with Victoria opening up just in time, and continued government support in the form of tapered JobKeeper and JobSeeker, we expect to see reasonably positive data points during the Christmas period compared to last year.”
NRA Deputy CEO Lindsay Carroll said “It’s been a very turbulent year for retail, there was a record drop in turnover in April but that was then followed by three consecutive months of increased sales. The future is going to remain rather uncertain, with the full impact of the recession expected to occur over the next six months.”
Carroll said that retailers across the country will be hoping for a good Christmas “The Christmas trade period is the most important time of year for retail. Large revenue gains in the final 6 weeks of the calendar year are crucial to many businesses, particularly that we’re now in a recession”
“Sales event such as Black Friday and Cyber Monday will also be taking place at the end of November and offer shoppers bargain prices less than a month out until Christmas. The 2020 Christmas season is going to be absolutely pivotal for retail and we encourage consumers to not be shy in splurging on gifts. A solid festive season for retail will go a long way to mitigating the current economic downturn”, she said.
