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July’s lockdown caused biggest monthly sales drop this year

Chairs are stacked on tables inside a restaurant closed for dine-in. Reuters/Loren Elliott

Retail sales in July tumbled 2.7 per cent, the largest month-on-month fall this year, as the worsening Sydney-based outbreak ravaged the retail sector’s confidence, according to data from the Australia Bureau of Statistics.

And, predictably, online sales increased in the inverse, according to NAB, which saw e-commerce sales increase 6.4 per cent during July compare to June, while 20 per cent higher than a year prior.

“Lockdowns and stay-at-home orders in many parts of Australia continued to impact retail trade in July, with many non-essential retail businesses closing their physical stores,” said ABS director of quarterly economy wide surveys Ben James.

“In particular, the first full month of lockdown in New South Wales, following the Delta outbreak in June, saw retail turnover in the state fall 8.9 per cent. This was the largest fall of any state and territory since August 2020.”

The largest falls were seen in cafes, restaurants and takeaway food services (12.3 per cent down), clothing, footwear and personal accessory retailing (15.4 per cent down), and department stores (11.4 per cent).

Conversely, online growth was seen largely across all categories, but was particularly strong in grocery and liquor, personal and recreational goods, and, once again, department stores.

“In year-on-year terms, the [online] growth in department stores has been so rapid that the spend share has boosted its place to second largest in the index, behind homewares and appliances, and just ahead of grocery and liquor, which has also grown rapidly,” NAB chief economist Alan Oster said.

“Metro NSW had a marked contribution to overall growth this month, with an increase of nearly 28% on June, and up nearly 60% on last July.”

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