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Bricks-and-mortar, online retail grew in May

Though impacted by lockdown in Victoria, Australian retail turnover rose 0.4 per cent in May 2021 compared on a month-on-month basis and 7.7 per cent on a year prior, according to the latest ABS data.

The result follows a massive jump in yearly sales in April, as the industry cycled out the initial impact of the Covid-19 lockdown in April 2020.

“The May results are very good for retail, with a strong increase on the April results which is also promising when you consider the month is generally a quiet one for the sector,” NRA chief executive Dominique Lamb said.

“It shows that when the economy is relatively open that business is going well, but as the recent spate of state lockdowns has shown there remains uncertainty.”

Subpar contributions by Victoria in four of six industries were largely offset by growth in Queensland and Western Australia as, at the time, both states exited restrictions.

And while food retailing led the way in growth (1.1 per cent) across the nation, several other segments of the market fell: namely, household goods (-1.1 per cent), clothing (-0.4 per cent) and department stores (0.7 per cent).

In total, the ABS recorded sales of $31.1 billion in May.

Paul Zahra, chief executive of the Australian Retailers Association, said that the overall boost was welcome but that lockdowns are clearly having an impact on spending and confidence.

“The next two months of data is set to be a mixed bag across the states with businesses across NSW, Queensland, Western Australia and the Northern Territory impacted by lockdowns and restrictions as new Covid cases emerged,” Zahra said.

“The vast bulk of retail spending continues to be made in stores, with online sales representing 9.1% of total sales in May 2021.”

According to the NAB Online Retail Sales Index, online sales were up 2.7 per cent compared to the 3.5 per cent decline in April. And, unsurprisingly, online retail saw growth where physical sales faltered: Victoria led the way in e-commerce growth for the month.

“[Victoria] led sales growth in department stores, and was strong in other key segments like grocery and liquor, and games and toys,” said NAB chief economist Alan Oster.

“Interestingly, for a state entering lockdown, growth for takeaway food contracted along with most other states.”

More to come.

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