Strong retail sales in the ABS Preliminary Retail Trade Figures for June are a promising sign for retail, but remain bolstered by stimulus spending, the Australian Retailers Association (ARA) said today.
The preliminary data released today shows a 2.4% lift in estimated retail turnover from May to June 2020, with turnover increasing 8.2% in June 2020 compared with the same period last year.
ARA CEO Paul Zahra said June numbers capture a clear month of retail activity following the national lockdowns but prior to the new Victorian restrictions setting in.
“The preliminary June data provides a glimpse of what demand may look like once COVID-19 restrictions are permanently lifted, and it’s a healthier picture with a good appetite for spending.
“These figures tell us Government support measures are working as an effective economic stimulus – and with JobKeeper and JobSeeker extended into next year, that’s heartening news,” Mr Zahra said.
“However, not everyone is experiencing growth. We currently have a two-speed retail economy, with retailers in Victoria and those in CBD and tourist-dependent locations the hardest hit,” he said.
Discretionary retailers, particularly those selling clothing, footwear and personal accessories, continue to face difficult conditions despite the promising signs of June, with sales still remaining down year-on-year despite sales discounts and strong availability of stock following previous store closures.
“The impact of Victoria’s lockdowns is expected to be severe through July, dampening consumer sentiment and putting the brakes on a national recovery,” he said.
Mr Zahra said the extension of JobKeeper and JobSeeker will be a crucial support measure in the coming months, providing much needed certainty for retailers as they plan for the critical pre-Christmas trading period.
“The October to December quarter will be make or break for many retailers, as the sector still faces significant headwinds. The Federal Government support announced yesterday will alleviate some pressure for those hardest hit and help sustain consumer spending, which will protect the jobs of many Australians,” he said.
“Ultimately, the outlook for retail is positive, but we won’t see that for some time. The road to recovery remains challenging,” Mr Zahra concluded.
