Exporters in trouble, shops fear low stocks as coronavirus hits home
Victorian shoppers, local retailers and even the seafood industry could soon be impacted in the fallout from coronavirus as the crisis threatens jobs and causes factory closures in China.
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Shoppers face shortages of goods such as clothing, footwear and sunglasses in coming months if the coronavirus crisis causes prolonged factory closures in China.
But motorists can expect cheaper petrol, as cutbacks in international travel reduce the demand for oil and its cost.
Meanwhile, Victorian seafood businesses are on a knife edge as the virus threatens jobs and their entire industry.
Thousands of lobsters that were destined for China for the Lunar New Year celebrations now have no buyer.
Devastated Lakes Entrance-based fish wholesaler Wayne Dredge said: “We now have 1600kgs of lobster and literally don’t have a buyer.”
Local markets were an option — but consumers getting lobster for a bargain price would destroy any margin for businesses.
He was trying to keep eight employees in work, but was unsure how long he and others could hold on.
Prices have dropped from $140 to about $100 a kilogram.
CommSec chief economist Craig James said global oil prices slid to 13-month lows earlier this week.
“In Australia, the wholesale price has fallen to a seven-month low and this could lead to lower pump prices,” Mr James said.
Melbourne’s wholesale unleaded fuel price had dropped by 9c a litre since early January highs. Over coming weeks, this could mean lower pump prices.
Melbourne-based retail companies are now fearing the impact of the virus.
Novelty retailer Yellow Octopus’s chief executive Derek Sheen said he feared its shelves could be empty later in the year.
“Our imports take about two to three months to get here from China, from the factory through Customs to us. So at the moment there is no issue, but later on it will be significant,” Mr Sheen said.
Furniture seller Nick Scali’s crucial supply chain from China has been disrupted by the outbreak, with orders delayed by up to two weeks.
It is the first major retailer to warn of an impact on sales from the virus, with many others set to follow.
Managing director Anthony Scali told investors the impact should be cushioned by the fact it had reduced its exposure to China, with some output shifted to Vietnam and Malaysia. The firm was considering its options, including shifting more production to Vietnam if the situation worsened.
Australian Retailers Association executive director Russell Zimmerman said some clothing, footwear and personal accessories retailers had been notified of looming supply delays.
“Obviously it depends on how bad this virus is and how long it goes on. Some retailers have been told to expect delays of a number of weeks.
“Once those factories return to operation retailers will look at the fastest way to get product on shelves. But we could be looking at the possibility of some shortages.”
Myer and Bunnings are among retailers that have not seen a supply chain impact but are monitoring the situation.
Bunnings managing director Mike Schneider added: “We source products from thousands of suppliers, from all parts of the world and have options to source from elsewhere should supply be affected”.
City of Melbourne councillor Nicholas Reece warned that the city faced a recession because of “overreaction” to coronavirus.
Cr Reece said Melbourne’s economy had boomed over the past decade due to trade, tourism and students from China.
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“My personal opinion is that some of the current responses — such as terminating all flights to and from China, or asking all citizens to leave China like the UK has done — are overreactions,” he said.
“If we turn off the tap on our biggest export earners then we will tip the Melbourne economy into recession. The jobs and livelihoods of tens of thousands will be affected.”
Panic buying of P2 face masks and hand sanitisers have prompted calls from the Pharmaceutical Association of Australia for chemists to limit purchases per customer.