January retail sales strong despite Omicron woes

The spread of Omicron has done little to stop Australian consumers from splurging during January, as retail sales across the country increased by 4.9 per cent year-on-year.

According to data from Mastercard SpendingPulse, shoppers are continuing to upgrade their appliances as household goods sales rose by 10.4 per cent year-on-year.

Victoria recorded the largest sales boost at 8.3 per cent, followed by Tasmania at 6.6 per cent and Western Australia at 5.1 per cent.

Clothing sales were also bolstered by 8.5 per cent compared to January last year, but department stores recorded a drop of 2.7 per cent - marking eight consecutive months of negative growth.

Western Australia has recorded the biggest surge in retail sales compared to pre-pandemic levels in January 2020, rising by 23.4 per cent. Trailing behind was the Northern Territory (20.2 per cent) and Victoria (16.1 per cent).

Australian Retailers Association CEO Paul Zahra said it was pleasing to see the Omicron outbreak failed to dampen retail sales despite initial concerns about foot traffic and staff constraints in the early part of January.

“January was an up and down month for retailers – we began the year with a surge in Omicron cases, which impacted local supply chains and forced tens of thousands of workers into isolation each day,” he said.

“However, towards the end of the month, we saw daily caseloads start to come down, close contact isolation requirements were eased for essential workers and consumer spending started to lift.

“Overall, we’ve had a soft landing from Omicron and the impacts on sales have not been as severe as we originally feared.”

However, Zahra notes that recovery remains “uneven” as it depends on “what type of business you have and where its located”.

“Cashflow concerns remain a challenge for many retailers coupled with rising supply chain costs,” he said.

“CBD retailers are a focus on our path to recovery with foot traffic through capital cities still quite low with the absence of international tourists and exacerbated by people continuing to work from home. We were looking to forward to the international border reopening, which is the first step towards the revitalisation of our city centres.”

“Retailers have been resilient throughout the pandemic and will be breathing a sigh of relief that the worst of Omicron appears to have passed, and that consumer spending has remained fairly upbeat through this challenging period.”