AUSTRALIAN retail sales weathered the shadow lockdowns and supply chain issues caused by the Omicron wave in January, coming in nearly 5% higher than the same period one year earlier, but CBD retailers are still facing challenges in the “uneven” recovery.
The promising results arrive as Sydney and Melbourne workers are set to return to the office, masks mandates are lifted and international borders reopen.
The latest Mastercard SpendingPulse showed national sales increased 2.4% on December’s data, for a 4.9% annual rise.
Increases were seen in every state and territory, headed by Victoria with 8.3% annual growth.
Household goods led growth over 12 months with a 10.4% increase, following by clothing (8.5%) and food retailing (4.9%). Department store sales fell 2.7%, for the category’s eighth consecutive month of negative growth.
Sales were also 14.4% higher than the pre-pandemic January of 2020. Household goods sales were 25.6% higher, clothing 20.2%, and food retailing up 14.8%. Department stores dipped 2.3%.
Western Australia posted the biggest gains in that two-year comparison period, up 23.4%, following by Northern Territory with 20.2%. All states and territories except South Australia (up 8.3%) recorded double-digit growth.
“Overall, we’ve had a soft landing from Omicron and the impacts on sales have not been as severe as we originally feared,” Australian Retailers Association CEO Paul Zahra said.
“January was an up and down month for retailers – we began the year with a surge in Omicron cases, which impacted local supply chains and forced tens of thousands of workers into isolation each day. However, towards the end of the month, we saw daily caseloads start to come down, close contact isolation requirements were eased for essential workers and consumer spending started to lift.
“However, it remains an uneven recovery depending on what type of business you have and where you’re located and cashflow concerns remain a challenge for many retailers coupled with rising supply chain costs. CBD retailers are a focus on our path to recovery with foot traffic through our capital cities still quite low with the absence of international tourists and exacerbated by people continuing to work from home.
Businesses are hoping the reopening of the international border and a broad return to the workplace will help spur a bounce back in city spending. New South Wales has just ended its recommendation that employees work from home where possible and its face mask rules will be lifted this week, while Victoria is widely expected to follow suit with an announcement tipped for Friday.
The Victorian government yesterday announced another round of the “Melbourne Money” program, putting $10 million towards vouchers for food and drink in the City of Melbourne from Mondays to Thursdays.
Melbourne Lord Mayor Sally Capp said the CBD recorded 83% of pre-COVID foot traffic on Saturday, and 73% on Sunday.
“Retailers have been resilient throughout the pandemic and will be breathing a sigh of relief that the worst of Omicron appears to have passed, and that consumer spending has remained fairly upbeat through this challenging period,” Zahra said.
He said staff shortages will continue to compound recovery challenges.
Supply chain issues are also continuing to bite. Many businesses having to make earlier upfront payments for stock due to manufacturing and shipping delays, with container costs significantly higher than their usual rates.
