Australian retail sales are up 4.8% in December 2021 compared to the same time in the previous year, and increased 15.1% compared to 2019, according to figures released today from the Australian Bureau of Statistics (ABS).

Australian Retailers Association (ARA) CEO Paul Zahra said whilst the December results provide a welcome boost after a difficult 2021, year on year growth has slowed and the numbers reveal the beginnings of a slow-down as the Omicron wave began to impact on businesses.

The December ABS figures show Victoria leading the states, with sales up 6.5% compared to the previous year, followed by Western Australia (up 5.3%), New South Wales (up 5.2%) and Queensland (up 3.7%). Spending on retail goods remains elevated compared to December 2020 for all retail categories except for Department stores, down 9.0 per cent. Cafes, Restaurants and Takeaway food had the highest year on year increase at 6.8% followed by Clothing, Footwear, and Personal Accessories with sales up 5.8% and Household Goods at 5.1% in December compared to the same time in the previous year.

Online sales represented 12% of total retailing in December, with online sales continuing to normalise as Australians returned to physical store shopping.

ARA CEO Paul Zahra said the robust Christmas results provide a lifeline for struggling retailers, but all signs point to a dismal January as Omicron challenges continue to create a shadow lockdown.

“Christmas sales are when most discretionary retailers make up to two thirds of their annual profits. This solid December performance, following a strong November, will help replenish cash reserves for retailers affected by a year of restrictions and lockdowns.

“It’s pleasing to see categories such as clothing, footwear and personal accessories and hospitality surge at Christmas after a horror year. We can also see signs of a longer-term trend of the Black Friday weekend event and consumers shopping earlier for Christmas becoming cemented into the consumer mindset. Unfortunately, Department Stores continue to be affected by pandemic hesitancy and this ongoing challenge will create flow-on effects for other retailers particularly in our struggling CBD locations.

“The outlook for January and February is not as positive for retail with Omicron impacts causing confidence levels to drop to their lowest level in thirty years. Foot traffic has slowed significantly and ongoing staffing shortages, supply chain delays and pricing increases are creating another dire set of trading conditions for retailers this year.

Mr Zahra said some retailers are calling the opening months of 2022 the worst part of the pandemic - a shadow lockdown without the same levels of government financial support.

“Whilst we welcome the state and territory government business supports that are starting to come in, our reports tell us January was a devastating month for retail, hospitality and tourism businesses and we believe much more support will be required. Many small businesses are struggling to keep their doors open with staffing shortages and we are calling on federal and state and territory governments to step up to keep these businesses alive,” he said.