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Retail’s continued growth “doesn’t paint the full picture”

Retail turnover rose 10.7 per cent in January compared to the prior year, according to the Australian Bureau of Statistics. Seasonally adjusted, that figure dropped to just 0.6 per cent.

All states saw increased in sales during the month save for Queensland, which suffered a three-day lockdown that impacted retail trade.

The result follows on from December, which saw sales grow 9.6 per cent to $30.4 billion.

“Retailers had a really strong finish to the year and now that’s continued through to January, however it doesn’t paint a complete picture of what the sector is going through,” Australian Retailers’ Association chief executive Paul Zahra said.

“While the unemployment rate is trending down and house prices are strong – our economic recovery is uneven, and there are still pockets of retail across the country that will suffer when the JobKeeper and JobSeeker schemes wind up [in March].”

The Federal Government has remained committed to cutting the JobKeeper and JobSeeker support measures which have largely kept the business sector afloat, despite increased resistance from industry groups, opposition leaders, as well as Reserve Bank governor Philip Lowe.

The government is banking on businesses hiring workers through its JobMaker scheme, which will pay a portion of new employees’ wage, while supporting its existing workers on their original payrate. This will only be possible if customer demand remains high, but with less support it remains to be seen if Australians will be as comfortable spending on non-essential purchases.

“Overall, whilst we don’t believe we will face a fiscal cliff, sales are expected to soften throughout the year as we’re continuing to live with the uncertainty of Covid,” Zahra said.

And the continued possibility of a hard lockdown coming into effect at the drop of a hat still exists, as has been seen in several states recently, and could be disastrous for businesses that are no longer getting fiscal support.

“An efficient and successful rollout of the COVID vaccine will be critical to removing the potential for hard lockdowns, providing business certainty and ensuring a timely economic recovery,” said National Retail Association chief executive Dominique Lamb.

“[Queensland’s drop in sales] underlines the fact that while the possibility of a hard lockdown remains, a degree of business uncertainty will remain.”

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