Retailers say state border closures are the last hurdle for the embattled sector
Stubborn state border closures remain the last hurdle for traders gearing up for the Christmas trading season.
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Stubborn state border closures remain the last hurdle for retailers gearing up for Christmas, according to the Australian Retailers Association.
ARA chief executive Paul Zahra said the latest retail turnover figures combined with the Reserve Bank’s recent rate cut have boosted confidence the looming holiday shopping season will bring a wave of reprieve for businesses heavily impacted by the COVID-19 pandemic.
“There is a lot to be optimistic about,” Mr Zahra said. “Victorian retailers are now open for business and consumer confidence is at an eight month high.”
Figures released by the Australian Bureau of Statistics show retail turnover for the month of September fell 1.1 per cent compared to August.
But it is still 5.6 per cent higher than September 2019.
The peak retailing body noted ongoing Queensland and West Australian border closures barring visitors from certain regions of Australia are threatening potential trading volumes.
Mr Zahra said there is a high correlation between the tourism numbers and the amount sold by retailers at the point of sale.
“Tourism and retail work hand-in-hand,” Mr Zahra said.
“If there is less visitation then there is less gifting in nature.”
The ABS said the fall in monthly retail turnover was largely due to falls in food and essential goods consumption, but cafe, takeaway and restaurant services rose 3.5 per cent, while department store retailing rose 1 per cent.
All states and territories expect the Northern Territory experienced monthly falls.
The Christmas trading season traditionally begins the day after the Melbourne Cup and is a period where retailers can make up to two thirds of annual earnings.
Black Friday and Cyber Monday sales are also becoming increasingly important, with the newly added discount event experiencing its largest trading volumes in 2019.
However, Mr Zahra said the industry is likely to spread the sales day over a period of up to a week due to COVID-19 health measures limiting the amount of shoppers in a physical store.
“Retailers will try and spread that particular event over several days,” Mr Zahra said.
ABS director of surveys, Ben James said September quarter rose 6.5 per cent, the largest quarterly rise the bureau has ever recorded.
“The quarterly rise was driven by a recovery in industries that saw sharp falls in the June quarter 2020, as well as continued strength in industries such as food retailing, other retailing and household goods,” Mr James said.
Cafes, restaurants and takeaway food services experienced a surge of 28.1 per cent compared to the prior corresponding quarter, while clothing and footwear retailing rose 35.5 per cent over the same period.
Mr James said: “Despite the quarter-on-quarter rise, both industries continue to trade below the level of September 2019 in seasonally adjusted volume terms”.
Originally published as Retailers say state border closures are the last hurdle for the embattled sector