Cafes, gyms, highlight Covid divide between NSW and Victoria

Victoria’s lockdown is depressing consumer spending across Australia, but some businesses in NSW are defying the gloom.

A cafe at Sydney’s Bondi Beach. Cafe spending in NSW has recovered to be back above pre-COVID levels, according to one new report. Picture: Jane Dempster

Consumer spending remains depressed as coronavirus restrictions continue to weigh on the economy and as Victoria remains under strict lockdown.

Overall spending in Australia is down 5 per cent on normal levels, according to a new weekly spending report released by illion and AlphaBeta, part of Accenture.

For the week to August 23, NSW was on the same downward spending trajectory as Victoria in early August, with the lowest spending since early June.

But according to the latest figures, spending in NSW has recovered slightly, but still remains 3 per cent below pre-COVID levels. Cafe spending in NSW has lifted to be 18 per cent above normal, pre-COVID, levels, while cafe spending in Victoria was at the other end of the spectrum, down 42 per cent compared to normal levels.

Meanwhile online retail spending was up 21 per cent in Victoria but down 14 per cent in NSW.

“It’s clear that the Victorian lockdown is having a psychological spending impact across Australia,” said AlphaBeta director Andrew Charlton.

“The impacts are being seen as far away as Western Australia – which shows that even with border closures, you can’t keep out the economic impacts of COVID-19.

“Confidence will only return once there are clear measures in place – across all governments – about how we manage to live and work with the threat of COVID going forward.”

Gym spending in NSW is now back at pre-crisis levels, the report found, while spending at gyms in Victoria had dropped to 25 per cent.

“Gyms in NSW are a clear winner, now going even stronger than their busiest phases in January,” said illion chief executive Simon Bligh

“Could this be people wanting to get rid of their COVID kilos and start getting ready for summer?”

Sydneysiders can see summer coming and want to get fit. Bondi Beach at the weekend. Picture: Jane Dempster.

In a separate report, research conducted by Xero and AlphaBeta found that small businesses revenue recovered in July to be down only 1.9 per cent on the prior year, compared to being down 10.9 per cent in June.

Small businesses in Victoria recorded more subdued revenue growth in July at 3.2 per cent lower than a year ago.

“Our July data highlights how the different levels of restrictions in states across Australia have impacted the pace in which small businesses rebound,” said Trent Innes, managing director Australia and Asia, Xero.

“While the impact of Melbourne’s return to lockdown muted the overall revenue and job growth figures across the country in July, the data signals how small businesses can play a key role in jump-starting our nation’s economy.”