While the year that passed brought with it a deep recession caused by the impact of Covid-19 health and safety restrictions, retail spending has been a particularly bright spot according to Deloitte.

However, in the latest in its Retail Forecasts series, Deloitte Access Economics said that while many retailers have enjoyed significant windfalls of late, a transition back to more ‘normal’ spending behaviour could stifle this growth.

Retail spending ended 2020 on a high note, up 6.4 per cent, and while the year ahead is shaping up to be one of recovery retailers are very likely to face challenges in 2021: with spending to end 0.4 per cent lower than the year prior.

And, the sectors that have enjoyed the most benefit from Covid-19 are likely to be hit the hardest, Deloitte argued, with household goods and supermarkets likely to face larger headwinds.

“The retail sector tackled the Covid-19 crisis, and came out on top,” said Deloitte Access Economics partner and report author David Rumbens.

“But, as is so often the case with Australian retail, and this is the same for many other national economies too, there are still some challenges ahead.

“Unfortunately for many retailers in 2021, the economic recovery and re-opening of industries will more likely be a headwind than a boon. This means more opportunities for non-retail spending, and an increased shift back towards travel and hospitality over the year.”