Retail leaders have pushed back strongly against the Victorian Government’s plan to keep vast swathes of Melbourne’s retail sector closed until at least October 26. Stephen Younane, co-founder and CEO of the Melbourne-based Retail Prodigy Group, said he was surprised at the government’s decision to extend the lockdown and called for a “common sense plan for Victoria that balances health and safety with the economy”. Dymocks’ managing director Mark Newman described the
d the decision as “extreme” and said it should be reversed.
Even Nick Pearce, co-founder and CEO of HoMie, a Melbourne-based social enterprise tackling youth homelessness, who believes safety must come first, was unable to hide his disappointment.
“It certainly feels like an uphill battle,” he told Inside Retail. “Short and medium-term, we’ll be able to ride this out, but the longer it goes, it’s almost like you get to the summit, and then they change the summit.”
“You just need answers”
On Sunday, Premier Daniel Andrews laid out a roadmap to gradually ease restrictions in regional Victoria and metropolitan Melbourne, which has been in a Stage 4 lockdown since August 5.
Retail stores and restaurants will not be able to open to the public until step three of the plan. This is currently scheduled for October 26, but it depends on the state having an average of no more than five daily cases and no more than five unknown transmissions in the prior two-week period. On Monday, the state recorded 41 new cases in the previous 24 hours.
The fact that the reopening is not only several weeks away, but tied to a case count, is a major concern for retailers, many of which have already closed and reopened physical stores multiple times.
“It’s incredibly difficult to plan,” Pearce said. “There’s still ambiguity [in the roadmap], and at this point in time, you just need answers.”
Wesfarmers’ CEO Rob Scott expressed the same view in an interview with The Sydney Morning Herald.
“It will be impractical for many retailers to plan for and trade through such uncertainty at what is normally the busiest time of the retail year,” he said.
According to Brian Walker, founder and CEO of the Retail Doctor Group, around 30 per cent of retail sales – often more, depending on the retailer – occur between November and January. The possibility that the reopening could be delayed beyond late October would be catastrophic, he said.
“For retailers that have come off the back of difficult economic conditions prior to Covid – bushfires in some regions, very cautious consumers, heavy competition and now lockdown in their most profitable period – if it continues past November, into December and January, it will be catastrophic for many,” he told Inside Retail.
While many retailers have seen an uptick in online sales from Melbourne customers in lockdown, it generally isn’t enough to replace store sales.
At the same time, many retail leaders say they have proved they can operate safely.
“Retail has already demonstrated that as an industry we can balance the two [health and safety and the economy] very well,” Younane said. “We retailers have a model that works.”
Newman said Dymocks has a strong Covid Safe plan in place and that he firmly believes the business can reopen “without putting franchise owners, employees or the community at risk”.
“We also fundamentally believe that books are an essential service in particular for mental health, well-being and education and learning and are lobbying the Victoria Government to make this change,” he told Inside Retail.
At the start of Stage 4, the government did walk back some industry restrictions after receiving pushback from businesses, but it seems unlikely that Andrews will speed up the reopening. He has repeatedly made the case for easing restrictions in “a safe, steady and sustainable” way.
Perhaps the best retailers can hope for is increased support from State and Federal Governments. There has been talk of keeping JobKeeper payments at the current level for businesses in Victoria, while payments are gradually reduced for organisations in other parts of the country, but, at the time of this writing, nothing definitive had been announced.
This story appears in the August 9, 2020, issue of Inside Retail Weekly.