Australia is facing its first economic recession for the first time in decades. In a new report from the Australian Bureau of Statistics, retail turnover has continued to increase amid the global pandemic and uncertain economic times.
Retail turnover has risen 3.2 percent in July, the Australian Bureau of Statistics has reported.
This comes after an increase in turnover of 2.7 percent the month prior. “Retail sales in July 2020 were 12.0 percent above July 2019, with sales in household goods particularly strong, 29.4 percent above the same month last year,” said Ben James, the Director of Quarterly Economic Wide Surveys.
Australia is currently facing its first recession since 1991, plunging us into an uncertain environment for the first time in 29 years.
“The July figures are good, but they need to be put into proper context. The true extent of the economic fallout from this recession is yet to be felt, the next six months are going to be very difficult for all industries,” said Dominique Lamb, the CEO of the National Retail Association.
“We’re operating in highly volatile times and there’s a myriad of variables at play. JobKeeper and JobSeeker payments have lifted spending, but these are temporary measures that will end at some point, while some degree of restrictions will remain in place until a vaccine arrives.”
Household goods led the monthly rises, with an increase of four percent. This comes as consumers continue to purchase larger items for their homes.
“Turnover in clothing, footwear and personal accessory retailing (7.1 percent) and cafes, restaurants, and takeaway food services (4.9 percent) rose across the country, with the exception of Victoria, where the reintroduction of Stage Three stay-at-home restrictions in July partially offset these rises. As was the case in April, restrictions led to significant falls in these industries in Victoria,” said James.
Across Australia, there was a general increase in the majority of states. New South Wales saw a rise of 5.9 percent, ACT followed with 5.8 percent, Queensland experienced an increase of five percent. For Western Australia, there was an increase of 3.8 percent, with NT rising by 3.1 percent, Tasmania increasing by 4.2 percent and SA by 2.9 percent. Victoria was the only state to experience a decline, with 2.1 percent.
The Increase in Online Spend
Online sales have continued to increase in popularity, making up for 9.8 percent of total retail turnover. This is a slight rise from June, where the turnover was 9.7 percent. In July 2019, online retail contributed to 6.3 percent to total retail.
“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 Paul Zahra, the CEO of the Australian Retailer’s Association.
“However, discretionary retailers continue to show a slower rebound, with the clothing, footwear and personal accessory category up 3.5 percent 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 percent of all retail sales in July.”
The Next Few Months
The road to economic recovery is a long one, experts suggest. “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,” Zahra explained.
“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.”
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