September Quarter Records Largest Fall in National Sales Volumes; Online Booms

Power Retail By Power Retail | 04 Nov 2021

As we come out the other side of lockdowns, retail sales certainly felt the pinch in the September quarter.

According to the ABS, there was a 4.4 percent fall in retail sales for the September quarter, following an incremental rise of 0.7 percent in the June quarter.

The Delta outbreak, which occurred in June this year, saw the return of lockdowns across the states of Australia – in particular Victoria and NSW.  This has resulted in store closures and the reliance on online only. As such, the ABS has indicated that this is the largest quarterly fall in sales volumes ever recorded.

“Similar to previous lockdown periods, sales volumes fell in most of the discretionary spending industries with cafes, restaurants and takeaway food services (-18.7 percent), clothing, footwear and personal accessory retailing (-25.1 percent), department stores (-19.5 percent) and household goods retailing (-4.3 percent) significantly down in volume terms,” shared Ben James, the Director of Quarterly Economy Wide Statistics.

New South Wales recorded the most significant volume fall compared to the other states and territories, dipping -11.6 percent. Similarly, the ACT recorded a 13.9 percent dip in sales volumes. Victoria’s sales volumes also dropped, falling -4.5 percent.

In contrast, states like Western Australia and South Australia increased retail sales volumes by 4.1 percent and 1.7 percent, respectively. Tasmania’s retail sales rose by 2.2 percent, with both Queensland and the Northern Territory recording a 0.2 percent lift.

The Online Boom

Online retail sales, including large pureplay retailers, are reported under ‘other retailing’ – sales lifted by 0.9 percent. There was an increase in online sales over the last quarter. Online retail now represents 15.3 percent of total retailing in September. This is a record high, with a massive $4.3 billion spent online. It’s an increase of 3.4 percent compared to the previous month and an enormous 42.6 percent lift from last year’s same period.

“More Australians are getting the things they need online with a few taps of their fingers, and the investments retailers have made to boost their digital offerings are paying off,” shared Paul Zahra, the CEO of the Australian Retailers Association.

“Whilst the record amount of online spending was driven by lockdowns in NSW, Victoria and the ACT, where people were limited in terms of their physical shopping options, we expect online sales to remain at elevated levels moving forwards.

“The incredible demand for products online is adding to the stress our supply chains are under, so people need to consider shopping early for Christmas to ensure their products arrive on time.,” he said. “There’s a number of global and domestic issues at play, from the high cost of shipping to industrial action from port workers and delivery drivers. Retailers are used to navigating these challenges, which are likely to continue for the foreseeable future.”

As retail returns to normality across the country, Zahra explained that many businesses will now be able to make up for lost time and the ‘substantial’ trading losses they’ve incurred in the last few months of lockdowns and are ‘looking forward to a positive Christmas’.

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