Retail sales down in September but e-commerce volumes hit record high

Prolonged lockdowns in New South Wales, Victoria and the Australian Capital Territory had a dampening effect on overall retail sales in September, but according to new Australian Bureau of Statistics (ABS) data e-commerce is now operating at record highs.

Australian retail volumes fell a record 4.4 per cent, reflecting the COVID-19 situation in parts of the east coast. But with physical stores closed shoppers turned to e-commerce like never before - spending a record $4.3 billion online in September.

In addition, online sales represented 15.3 per cent of total retailing in September, with total e-commerce spend up 42.6 per cent compared to the same month in 2020.

Non-food online sales were $3.2 billion in September – an increase of 48.2 per cent compared to the same time last year. Online food sales in September were $1.1 billion – an increase of 28.4 per cent compared to September 2020.

Australian Retailers Association (ARA) CEO Paul Zahra said Australians in locked down jurisdictions turned to the internet in a big way for their shopping, but the figures should stabilise in the coming months as people return to physical stores.

“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,” Zahra said.

“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.”

Zahra said while it was disappointing to see retailers suffer overall in September, with lockdowns now over and the busy Christmas shopping period in full view things are looking up for bricks and mortar and online stores alike.

“Most discretionary retail stores make up to two-thirds of their profits during the festive trading period, and with the worst of the lockdowns now behind us, many of these businesses will be looking to make up for the substantial trading losses they’ve incurred in recent months and are looking forward to a positive Christmas,” Zahra said.

Zahra today also welcomed the shop trading hour exemptions announced by the South Australian Government, which will allow businesses to further increase their trading potential over the Christmas period.

Zahra said the exemptions announced today will ensure the state’s retail businesses and their customers don’t miss out on the expected surge in sales over the festive season. In SA alone, more than $3.6 billion is expected to be spent in the lead tip to Christmas.

“Christmas is the most critical time of year on the retail calendar, when most discretionary stores like those in fashion and accessories, make up to two-thirds of their profits,” Mr Zahra said.

“We congratulate the South Australian Government for the exemptions they’ve announced today, but there’s still a long way to go to deliver long-lasting reform in this area,” Zahra said.

“Shops need flexibility to open when customers want to shop - in the morning on weekends, in the evening during the week and on public holidays. We currently have outdated trading hour restrictions in South Australia that are not reflective of modern-day consumer trends, but these exemptions are a step in the right direction.”