December retail sales bolstered by eased COVID-19 restrictions

December retail sales bolstered by eased COVID-19 restrictions

Australian consumers were unafraid to splurge during the holiday season when COVID-19 restrictions eased, as retail sales in December increased by 4.6 per cent compared to the same time last year.

According to data from Mastercard SpendingPulse, household goods remain the favourite category for shoppers as sales increased by 11 per cent year-on-year, followed by clothing at 7.7 per cent and food at 1.2 per cent.

While the entire country recorded sales growth, Victoria and Tasmania led the pack at 8.5 per cent, followed by Western Australia at 6.3 per cent.

States with low rates of COVID-19 community transmission saw the biggest jump in sales compared to pre-pandemic levels in 2019, with the Northern Territory recording an increase of 22.5 per cent and Western Australia seeing a jump of 17.9 per cent.

Australian Retailers Association (ARA) CEO Paul Zahra said sales are likely to be impacted in the new year with Omicron causing significant disruptions.

“The new year has delivered new challenges for retailers in the form of Omicron with tens of thousands of people being forced into isolation every day, and that’s taking a huge toll on the industry – and small businesses in particular, where just a few absences can wipe out an entire store’s workforce,” Zahra said.

While retail sales increased by 10.4 per cent on pre-pandemic levels in 2019, reduced foot traffic in CBD locations saw department store sales dip by 3.2 per cent.

“Whilst Christmas and holiday spending has held up well in December, and improved on last year, we had yet to reach the peak of Omicron and consumers were feeling more confident while going about their shopping. The trading environment has changed significantly this month with positive COVID cases and staff shortages resulting in some businesses having to limit their trading hours or close stores altogether,” said Zahra.

“We welcome the easing of close contact isolation requirements for essential food distributors, and other industries, but we’d like to see this expanded to broader retail to help with the staffing shortfall. Allowing foreign students to work extra hours is a positive step, along with visa fee rebates, but we need to get more people back to work sooner where it is safe to do so.”

“The Omicron impacts are set to be ongoing and targeted support packages need to be considered by governments to assist small businesses through this latest challenge.”

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