Melbourne’s lockdown drove a sharp drop in national retail turnover in August

Virus-hit Victoria’s retail spending sank 13pc in August, driving a sharp drop in national turnover.

Many luxury fashion shops in Collins Street including Gucci were emptied of their valuable stock in Melbourne CBD during COVID-19 stage four lockdown. Picture: NCA NewsWire/ David Crosling

Victorian retail spending plunged 13 per cent in August as Melbourne’s lockdown forced businesses to close and shoppers to stay at home.

The state’s heightened restrictions, which included curfews in the state’s capital and limits to how far residents could move from their homes, helped end a three-month retail recovery as national turnover dropped by 4 per cent in the month, according to seasonally adjusted figures from the Australian Bureau of Statistics.

While Victoria recorded the largest falls, the lull in spending growth also affected the two other big east coast states, with turnover falling by 2 per cent in New South Wales, and by 1.1 per cent in Queensland.

All industries recorded losses – once again led by Victoria, the ABS said. Spending on clothing and footwear declined 10.5 per cent in the month, and by 8.9 per cent in department stores. Turnover at cafes and restaurants dropped 6.6 per cent.

Even household goods retailing – a booming segment through the pandemic as Australians have been forced to spend more time working and playing at home – fell by 6 per cent.

Food retailing contracted by a smaller 0.2 per cent in the month.

The pattern of spending through the pandemic has been marked by hoarding in March as the COVID-19 crisis sparked panicked supermarket shopping, followed by a massive collapse in turnover during the national shutdown in April. Most of that month’s fall, however, had been reversed by May as restrictions eased and households took to online shopping and spending on their homes with gusto, supported by unprecedented levels of government income support.

Indeed, the ABS figures showed that total online sales in August were a record $3.2bn, or 81 per cent higher than a year earlier.

Despite heightened unemployment and a sharp recession, retail turnover at $29.5bn in August was 6 per cent higher than pre-COVID spending in February, the ABS figures showed. Spending in 2020 year-to-date is now $229.2bn, nearly 5 per cent higher than over the same period in 2019.

Turnover also fell, by under 1 per cent, in South Australia, Western Australia and Tasmania. In contrast, retail trade climbed by 2 per cent in the Northern Territory, and by 0.7 per cent in the ACT.