Preliminary sales figures from the Australian Bureau of Statistics showed a fall of 1.8% in June, compared to May when sales increased 0.4%. Through-the-year sales rose 2.9% compared to June, notwithstanding the latest round of Covid lockdowns in Sydney and Victoria.
Food retailing was the only industry to rise in June, with those states entering lockdown during the month driving the increase. All other industries fell, as Covid restrictions curtailed foot traffic and household movements, while retailers moved back to online distribution channels.
According to Australian Retailers Association CEO, Paul Zahra, lockdowns have a direct impact on consumer confidence and retail spending. “We fear the worst is yet to come with restrictions imposed across multiple states in July with month-on-month sales in Victoria falling 3.5% and 2% in NSW. We have seen 68 days of state-imposed lockdowns already in 2021 and there is no doubt that number will continue to climb.”
Zahra said small businesses are in crisis and are bearing the full brunt of lockdowns and while support arrangements are welcome, it’s not enough to stem the losses.
“Vaccines are key to seeing the back of lockdowns and restrictions and are our only ticket to freedom and the retail industry stands ready to help expediate vaccination rates in any way it can,” he said.
“Two weeks ago, National Cabinet agreed that lockdowns would be used as a last resort to managing new Covid outbreaks, but they appear to be with us for the rest of the year given concerns with the Delta variant.”
National Retail Association CEO, Dominique Lamb said the ABS results validate the challenges the retail industry is currently facing.
“The impact of Covid-19 restrictions is clear in the preliminary report and even businesses that are still trading are limited with reduced foot traffic and takeaway options only,” Lamb said.
“Victoria and New South Wales have seen the greatest drop, as both states had stay-at-home orders throughout the month and Queensland was affected by their snap lockdown and travel restrictions.”
She said retailers have been able to adapt to Covid to some extent, with online stores and distribution channels being one avenue that have helped them survive.
“However, one of the biggest challenges with Covid is the continued uncertainty and many retailers aren’t in a position to experiment with risk. Our governments need to closely monitor these losses and the effects it has on the community and further assistance packages are needed,” Lamb said.
Online shopping returns to unprecedented levels in Victoria
During the recent three-week lockdown in Victoria, it didn’t take long for pandemic-level online shopping to return, with only a 2% difference in online orders in June this year in comparison to last June when Melbourne was again in lockdown, according to data from ecommerce fulfilment provider, eStore Logistics.
In June 2020, Victoria boasted 75% year-over-year growth under the pressure of lockdown. Having seen these numbers quickly re-emerge in the current lockdowns shows the strength of the ecommerce sector, with many businesses already now having an online presence.
Home renovations saw an increase of 35% in online orders in June 2021 in comparison to June 2020. Home renovations was the fastest-growing category during lockdown last year with at least 100% year-over-year growth every month. This growth slowed down at the beginning of 2021 but has increased again.
eStore Logistics managing director, Leigh Williams said, “It was no surprise to see the return of Covid shopping habits in June as Victoria closed down for the fourth time, and we expect these trends to continue through July with both Melbourne and Sydney now in lockdown.
“Shoppers are well accustomed to purchasing online and a huge percentage of merchants have transitioned to ensure they have a fully functioning ecommerce offering. With less concrete government support packages in place this time around, it is more important than ever that businesses have diversified channels to ensure they stay afloat through these challenging times.”