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The Australian Bureau of Statistics (ABS) Retail Trade figures for October 2020 confirm a steady trend towards year-on-year growth, setting the scene for a healthy 2021, the Australian Retailers Association said on Friday.
Australian retail turnover rose 7.1% in October 2020, compared to October 2019, the ABS stated.
“By all reports, we are on track to have a robust Christmas trading period, with some strong November sales,” Retailers Association CEO Paul Zahra said.
“This is a heartening result bringing a positive close to what has been a horror year for many – particularly in Victoria. With Christmas trading delivering up to two thirds of a retailer’s profits, this will replenish cash reserves and help retailers prepare for what will hopefully be a less disrupted year ahead.”
Zahra added: “We have maintained that this year will ultimately be transformative for retail, however we are mindful of the uncertainty surrounding March next year when JobKeeper and JobSeeker are scheduled to end.”
With international borders remaining closed, the association says it sees some traditional offshore holiday spending by Australians being diverted to retail in the early months of next year.
However the removal of Federal stimulus without a broader economic rebound will undoubtedly affect retail spend and broader consumer confidence, the association believes.
Whilst online trading levelled off slightly in October, Zahra said the November-December period is likely to see a resurgence of online shopping, driven by powerful sales events such as Black Friday and a desire by both shoppers and retailers to spread the Christmas shopping activity across online and instore purchasing.
Food and household goods continued to show the strongest year on year gains in October whilst discretionary spending categories including clothing, footwear and accessories and cosmetic purchases remain moderately down on their year on year performance.
“We are keen to see the discretionary categories regain their full strength – this will be one of the best indicators of retail health as we head into a new year,” said Zahra.