Online Sales Take Slight Hit But Remain Above 2020 Levels

Power Retail By Power Retail | 02 Dec 2021

Even as traditional retail channels reopen, online sales remain strong, the Australian Bureau of Statistics shared in its monthly retail turnover update for October 2021. 

According to the report, retail turnover increased 4.9 percent month on month and rose 5.2 percent compared to the same period in October 2020.

While the value of online sales dipped 3.4 percent compared to the previous month, total online retailing sales were $4.1 billion in October. But as states like New South Wales and Victoria emerge from extended lockdowns, this comes as ‘no surprise’ to retail experts, including Paul Zahra, the CEO of the Australian Retailers Association.

“It’s no surprise to see a slight drop in the proportion of online spending for October, given the Delta lockdowns came to an end in NSW, Victoria and the ACT and people returned to physical stores. The overall trend though for online sales remains incredibly strong, up 33.8 percent compared to the same time last year,” he said.

Online retail turnover is up 49.6 percent compared to May 2021, prior to the Delta outbreak. Online retail turnover made up 13.2 percent of total sales in September 2021. This comes off the back of the previous month’s record of 15.3 percent.

“We’re continuing to see a lot of pent-up demand for shopping across Sydney, Melbourne and Canberra with people back out and about in great numbers supporting their local businesses, which is great to see. We’re coming off a record-breaking Black Friday, with sales exceeding $8 billion according to NAB – well above expectations.”

Zahra explained that these figures will provide strong momentum for retailers leading up to the peak sales season. This is, undoubtedly, the busiest time of the retail calendar, with many discretionary stores making up two-thirds of their profits, he shared.

“Despite the lurking threat of Omicron, we’re encouraged to see state and territory leaders stay committed to their reopening plans. The delayed return of international students and skilled migrants is disappointing, but not surprising, so staff shortages will remain a challenge for businesses going forward,” he said.

“We have to learn to live with the virus, and [its] variants, and manage things in a responsible way without devastating businesses and livelihoods. If severe restrictions are reintroduced on retail, it would derail our recovery, just when the sector is getting its mojo back.”

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