Australian retail sales increased 10.7% in January, compared to the same time last year, according to preliminary data released by the Australian Bureau of Statistics (ABS).

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 continued through to January, however it doesn’t paint a complete picture of what the sector is going through,” Zahra said.

“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.

“According to ARA strategic partner Deloitte, there’ll be close to $5 billion less in government support flowing through the economy each month,” he said.

“Overall, whilst we don’t believe we will face a fiscal cliff, sales are expected to soften throughout the year as we’re continuing to live with the uncertainty of Covid.

“As we have seen in Victoria, new cases can emerge at any time and retailers are operating at the whim of the different premiers in terms of how they might respond with lockdowns and restrictions. 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,” Zahra said.

National Retail Association CEO Dominique Lamb said the steady rise in monthly sales indicated good news, but uncertainty remains until the pandemic is over.

“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,” she said.

“Queensland appears to be the only state to have gone backwards in January, 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. “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,” Lamb said.