RETAIL sales in the important trading month of December came in higher than the previous year as consumers took advantage of eased COVID restrictions, but Omicron is expected to smash January spending.
Australia is the throes of a “shadow lockdown” that has halted the market momentum built in the final months of 2021, with shoppers kept at home either through isolation or wanting to dodge the virus. Both the NSW and Victorian governments have extended their commercial tenancy rent relief schemes in a bid to protect small businesses.
According to MasterCard SpendingPulse, which measures in-store and online retail sales across all forms of payment, retail sales across the country increased 4.6% in December compared to the same time the previous year, and were up 10.4% on the pre-pandemic 2019.
Household goods was the top-performing retail category, up 11% in December compared to the previous year, while clothing was up 7.7%.
Department store sales were down 3.2% as foot traffic in CBD locations remained low.
All states and territories recorded an increase in sales in December compared to the previous year, with Victoria and Tasmania leading the way, both up 8.5%. Australian Bureau of Statistics data showed retail turnover had risen by 7.3% nationally in November to a record level.
Mastercard SpendingPulse December 2021
| SECTORS (TOTAL SALES) | SEASONALLY ADJUSTED GROWTH | NOMINAL SALES GROWTH | |
| Dec-21 vs Nov-21 | Dec-21 vs. Dec-20 | Dec-21 vs Dec-19 | |
| TOTAL AUSTRALIA RETAIL SALES | -3.2% | +4.6% | +10.4% |
| Clothing | -12.8% | +7.7% | +12.8% |
| Department stores | -3.0% | -3.2% | -4.1% |
| Household goods | -2.1% | +11.0% | +21.6% |
| Food retailing | +0.9% | +1.2% | +9.8% |
| STATE/TERRITORY % CHANGES FOR TOTAL RETAIL SALES | NOMINAL SALES GROWTH | |
| Dec-21 vs Dec-20 | Dec-21 vs Dec-19 | |
| NSW | +1.5% | +4.5% |
| Victoria | +8.5% | +10.4% |
| Queensland | +4.4% | +15.5% |
| Western Australia | +6.3% | +17.9% |
| South Australia | +0.2% | +5.9% |
| Australian Capital Territory | +8.1% | +18.3% |
| Northern Territory | +3.5% | +22.5% |
| Tasmania | +8.5% | +12.7% |
| Australia | +4.6% | +10.4% |
However, Australian Retailers Association (ARA) CEO Paul Zahra said sales are likely to be impacted in the new year with Omicron causing significant disruptions.
“The new year has delivered new challenges for retailers in the form of Omicron with tens of thousands of people being forced into isolation every day, and that’s taking a huge toll on the industry – and small businesses in particular, where just a few absences can wipe out an entire store’s workforce,” Zahra said.
“Whilst Christmas and holiday spending has held up well in December, and improved on last year, we had yet to reach the peak of Omicron and consumers were feeling more confident while going about their shopping.”
Zahra welcomes the easing of close contact isolation requirements for essential food distributors, and other industries, but said the ARA would like to see this expanded to broader retail to help with the staffing shortfall.
“The trading environment has changed significantly this month with positive COVID cases and staff shortages resulting in some businesses having to limit their trading hours or close stores altogether,” Zahra said.
The list of workers exempt has been expanded to include those in freight, transport and food production in a bid to combat severe supply chain issues that have left supermarket shelves empty and stock in short supply. Wesfarmers has reported reduced sales at Kmart, Target and Officeworks, and shopping centre foot traffic has fallen.
Zahra said allowing foreign students to work extra hours is a positive step, along with visa fee rebates, but “we need to get more people back to work sooner where it is safe to do so”.
He called for more government assistance.
“The Omicron impacts are set to be ongoing and targeted support packages need to be considered by governments to assist small businesses through this latest challenge.”
