THE Melbourne lockdown extension will deal a $2 billion sales blow to retailers, according to the National Retail Association, which along with the business peak body the Victorian Chamber of Commerce and Industry, have called on the state and federal governments to work together and provide financial assistance.
NRA, which represents more than 30,000 retailers, calculates that the cumulative loss in sales across the 14 days will prove substantially higher than initial forecasts of $1 billion over seven days.
NRA CEO Dominique Lamb said that while the sector accepted the state government had no choice, the extended lockdown would still prove to be a crippling blow to many retail businesses across the state.
“The government had little choice but to extend the current round of hard-line restrictions, but make no mistake this will be a hammer blow to retail businesses throughout Melbourne.
“Across the entire 14-day lockdown, the NRA calculates that Victorian retail will lose a combined total of two billion dollars in sales,” she added.
Lamb argued that, in addition to the $250 million business package announced last weekend by the Victorian government, further assistance would be required.
“Retailers understand that public money doesn’t grow on trees, but without further government assistance real carnage could be inflicted on the Victorian economy.
“Each day Melbourne remains in lockdown businesses are either having revenue channels dramatically slashed or shut off all together, but still have to pay wages. If no help arrives, many affected retailers will have no choice but to shed jobs,”
“The federal government’s JobKeeper program did a marvellous job in keeping businesses across all industries afloat during the height of the pandemic. But clearly hard-lockdowns are not yet a thing of the past and we strongly urge the Commonwealth to provide targeted assistance to retail businesses currently haemorrhaging during this round of heavy-handed restrictions.” Lamb said.
The Victorian Chamber of Commerce and Industry also renewed its call for the state and federal governments to work together and provide assistance. Chief executive Paul Guerra said businesses and their workers are looking for support to help them get through the latest lockdown.
“It was clear on Sunday and it’s even more clear today that workers need support. The Victorian Chamber continues our call for the federal and state governments to come together to help workers who will go without a pay cheque for yet another week.”
“We should recognise we are in a different position than we were during previous lockdowns: we have a vaccine and people are getting vaccinated in droves, we have a state-mandated QR code system and our contact tracing capabilities have vastly improved.
“Now business needs to see a more targeted approach to outbreaks that protects the health of all Victorians while ensuring business and workers can keep trading. We need a clear commitment that this will end by next Friday or earlier and that business can trade at pre lockdown levels, albeit with more widespread mask use.
“Victorians need and deserve transparency and clarity on what the parameters are to go into lockdown and what we need to achieve to open up again. How can we come together as a community and keep our business, jobs and learning alive while keeping Victorians safe?,” Guerra said.
Meanwhile the latest NAB Online Retail Sales Index shows growth contracted again in April (-3.7%), after declining 1% in March.
In year-on-year terms, the growth in the NAB Online Retail Sales Index slowed considerably (1.4% y/y). The base effects from the high sales growth period of 2020 are now evident in the year-on-year comparisons.
NAB estimates that in the 12 months to April, Australians spent $46.7 billion on online retail, a level that is around 12.9% of the total retail trade estimate, and about 39.6% higher than the 12 months to April 2020.
NAB chief economist Alan Oster said the contraction in sales this month was driven by another drop in the largest sales category, homewares and appliances in all states except WA and ACT.
“There was also a drop for other key sales categories, fashion, and personal and recreational goods, which weighed heavily on the overall result. In year-on-year terms, the personal and recreational goods category contracted heavily. However, base effects are playing a part here, as this is a comparison to a period where the category recorded strong growth.
“In month-on-month growth terms, while both domestic and international sales contracted, this months result was more heavily weighted towards domestic retailers. Categories like homewares and appliances, that are predominantly domestic, contracted for both, as did fashion, which has a larger international presence. The game and toy, and personal and recreational goods, categories looked to be similarly affected, regardless of merchant location in April. Over the past year, growth had been driven overwhelmingly by domestic online retailers, but international retailers, which did not grow as strongly in 2020, are beginning to outpace domestic.” Oster said.
