ABS Retail Trade Figures for July continue to be driven by government stimulus

ABS Retail Trade Figures for July confirm expectations of a strong overall retail performance, continuing a government stimulus-driven rebound prior to the stage four restrictions in Victoria, the Australian Retailers Association (ARA) said today.

Today’s figures reveal a 3.2% lift in retail turnover from June to July 2020, with turnover increasing 4.4% in July 2020 compared with the same period last year, though the increase was shared unevenly across different states and retail categories.

ARA CEO Paul Zahra said the positive results were overshadowed by restrictions which had since come into force in Victoria. Victoria recorded a July fall of 2.1% on the previous month, with approximately three weeks of stage three restrictions imposed during the survey period. The ABS data for August will capture the full monthly effect of stage four lockdowns in Victoria, with the flow-on effect likely to be felt across state borders.

“We’ve witnessed the emergence of a two-speed economy, and today’s figures confirm retailers haven’t been sharing the spoils of the stimulus-led rebound. The stay-at-home, nesting trend has continued to boost sales of household goods, even though Australians ventured outside more often in July,” said Mr Zahra.

“However, discretionary retailers continue to show a slower rebound, with the clothing, footwear and personal accessory category up 3.5% year-on-year, a smaller return to annual growth for the first time since January. Fortunately, some retailers have been supported by the increase of online shopping, which continues to grow and accounted for 9.8% of all retail sales in July.”

Mr Zahra emphasised that spending had been buoyed by stimulus and support measures, with dampened sales figures likely as support measures are tapered off and as the country suffers the dual headwinds of restrictions and challenging economic conditions.

“The overall economic situation remains a big concern for the retail industry, with most retailers exposed to the risks of the recession confirmed this week, growing unemployment, and the flow-on effects this will have on consumer spending.

Mr Zahra said that as Australians learned to live with COVID-19 conditions, retailers offered a safe and efficient retail experience for people returning to stores ahead of the peak trading season.

”Each dollar spent in-store or online at a local retailer supports somebody’s job or business, and contributes to the overall retail supply chain which is crucial to an economic recovery. Australian retail has proven to be a safe environment throughout the pandemic, with retailers going above and beyond to look after their staff and customers.

“These next few months will be an intense time as we enter a peak trading season like no other, and we expect the build up to Christmas to look a little different for shoppers,” Mr Zahra said.

“We are hoping for a return to spending in states that have had minor outbreaks and a release of pent-up demand as people return to shopping in Victoria as we build-up towards the summer holidays.

“Shoppers and retailers have been co-creating the new shopping experience, which is safer, more convenient and more personal than ever before as retailers adapt to the use of new smart technology.

“The final quarter of 2020 is a make or break time for many retailers, with many stores relying on a big Christmas trading period to give them a strong foundation and set them up for recovery into the new year,” Mr Zahra concluded.

Monthly Retail Growth (June 2020 – July 2020, seasonally adjusted)

Department stores (4.0%), Food retailing (1.2%), Household goods retailing (4.0%), Cafés, restaurants and takeaway food services (4.9%), Other retailing (4.4%), and Clothing, footwear and personal accessory retailing (7.1%).

Western Australia (3.8%), Australian Capital Territory (5.8%), Queensland (5.0%), Victoria (-2.1%), South Australia (2.9%), Tasmania (4.2%), New South Wales (5.9%), and Northern Territory (3.1%).

Overall month-on-month sales growth: 3.2%.

Year-on-Year Retail Growth (July 2019 – July 2020, seasonally adjusted)

Food retailing (15.0%), Cafés, restaurants and takeaway food services (-12.1%), Other retailing (14.9%), Household goods retailing (29.4%), and Department stores (4.4%), and Clothing, footwear and personal accessory retailing (3.5%).

Tasmania (18.7%), Queensland (16.8%), Victoria (2.9%), Western Australia (18.4%), Australian Capital Territory (16.6%), South Australia (14.1%), Northern Territory (8.9%), and New South Wales (13.5%).

Overall year-on-year sales growth: 4.4%.

ENDS…for more details: Tim Janczuk (m) 0431 045 373 (e) media@retail.org.au

About us: founded in 1903, the Australian Retailers Association is Australia’s largest retail association, representing a $325bn sector employing more than 1.3m people. As Australia’s premier retail body, the ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members. To learn more, visit www.retail.org.au or call 1300 368 041.

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