The Omicron outbreak has failed to dampen retail sales despite initial concerns about foot traffic and staff constraints during the early part of January according to Australian Retailers Association (ARA) CEO Paul Zahra.
Fresh Mastercard SpendingPulse data released Monday showed a 4.9 per-cent year-on-year increase in retail sales across the country in January and a 14.4 per-cent rise on pre-pandemic levels of two years ago.
Spending was up in all states and territories, with the strongest increase in Victoria which recorded an 8.3 per-cent bump.
Zahra said the figures suggested the country had experienced “a soft landing from Omicron” and the impacts on sales has not been as severe as originally feared.
The Mastercard SpendingPulse data is based on analysis of in-store and online retail sales across all forms of payment. It showed almost all retail sectors delivered growth in January, with household goods the top-performing category, up by 10.4 per cent, followed by apparel, up 8.5 per cent. The only category posting a decline was department stores, down 2.7 per cent and posting the eighth consecutive month of negative growth.
“January was an up and down month for retailers,” Zahra said. “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. 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.
“However, it remains an uneven recovery depending on what type of business you have and where you’re located and cashflow concerns remain a challenge for many retailers coupled with rising supply chain costs,” Zahra added.
“CBD retailers are a focus on our path to recovery with foot traffic through our capital cities still quite low with the absence of international tourists and exacerbated by people continuing to work from home. We are looking forward to the international border reopening, which is the first step towards the revitalisation of our city centres.”
Zahra said staff shortages will continue to be a challenge to retailers recovering and the ARA was in ongoing dialogue with state and federal governments on solutions to this crisis.
“Supply chain issues are also continuing to bite, with many businesses having to make earlier upfront payments for stock due to manufacturing and shipping delays, with container costs significantly higher than their usual rates,” Zahra concuded.
This story first appeared on our sister publication Inside Retail
