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Bumper sale levels has boosted confidence the nation’s retail sector will be able to survive beyond the tapering of JobKeeper payments at the end of March.
The Australian Retailers Association is cautiously optimistic the threat of a financial cliff on March 31 has eased following the release of January retail data that revealed a massive spike in turnover compared with the same month a year ago.
Figures from the Australian Bureau of Statistics show retail turnover jumped 10.6 per cent compared with January 2020, with close to $30.5bn spent at merchants across the country.
In month-on-month terms, turnover rose 0.5 per cent on December.
The nation’s retail sector has experienced large up-and-down swings because of the coronavirus pandemic, which caused April turnover to plummet 17.7 per cent.
A significant proportion of retail businesses have been eligible for wage subsidy schemes such as JobKeeper due to mass virus lockdowns preventing physical trading.
ARA chief executive Paul Zahra said sales were likely to soften when JobKeeper ends; however, the lack of Australians being able to go overseas on holiday would likely increase domestic spending.
“While the borders are still up, there is still going to be a lot of apprehension around travel,” he said.
“That leads me to the fact that people are spending this (holiday) money in the country.”
The former boss of David Jones did say there were still “winners and losers” within the retail industry, with businesses linked to tourism and travel still financially scarred from the pandemic.
“Retailers like those at airports and in CBD locations are suffering and face an uncertain future when the JobKeeker scheme winds up at the end of the month,” Mr Zahra said.
“Their pain will be felt for many more months as long as international borders are closed and without a national road map for the easing of restrictions and consistency around domestic border closures.”
Mr Zahra said the federal government had given no indication to the peak retail body whether sectors still damaged by the pandemic would receive some form of ongoing support.
According to the ARA, subdued trading levels in airports and travel hubs was likely to result in further job losses during the year.
“They are currently laying thousands of staff, which is the untold story,” Mr Zahra said.
ABS data shows Queensland had the largest fall in retail sales, slumping 1.5 per cent on December trade, while Western Australia had the largest monthly increase of 2.1 per cent.
Clothing, footwear and personal accessory retailing suffered the largest falls compared with any other sector.
Food retailing was the best performer, rising 1.6 per cent over the month.
Mr Zahra said the shift to digital shopping continued to accelerate, with the latest ABS data showing a 63 per cent rise in the number of online sales compared with one year ago.
The ARA is hopeful the rollout of the COVID-19 vaccine will prompt greater confidence among households and businesses to spend.
Tax cuts expected to hit in April are also tipped to boost consumption activity in the Australian economy.
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