October sees more ‘mixed’ retail sales

Retail sales “bounced back” in October, according to Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment. This result was led by increased spending in the states that have been spared the pain of prolonged lockdowns.

Retail sales across the country increased 4.2% in October compared to the same time last year. They were up 10.1% on pre-pandemic levels compared to October 2019.

Lockdown’s impact

The states that have been living free of severe restrictions continue to record positive sales growth (when compared to October 2020):

  • Queensland (up 5.3%)
  • Western Australia (up 5.2%)
  • South Australia (up 3.5%)
  • Tasmania (up 4.7%)

Despite the October reopening of retail stores in NSW and the ACT after prolonged lockdowns, retail sales remained subdued. Sales were down 1.1% in NSW compared to the same time last year and down 12.2% in the ACT.

Victoria, where retailers reopened at the end of October, saw an increase in sales of 12.4% compared to October 2020. This is, however, compared to the state’s 100-plus day second wave lockdown last year.

Department stores recorded another sharp downturn in year-on-year sales (down 12.3%) in October. There were marginal increases, though, in sales of clothing (up 0.8%) and food (up 1.7%), while household goods experienced 14.2% growth in sales compared to October last year.

A positive forecast

Australian Retailers Association (ARA) CEO Paul Zahra says with 39 days to go to Christmas, and the worst of Covid now behind us, retailers are ramping up their operations and are looking forward to a positive festive trading period.

“Whilst it’s encouraging to see retail sales overall on the rebound in October, the results are mixed across the different categories and the states and territories,” he says.

“Department stores have recorded five consecutive months of negative sales growth, driven by the lockdown of the Australia’s two largest cities. However, we are hopeful of a strong finish to the year. Christmas is a time when department stores shine with customers set to return in greater numbers to physical stores.

“Retailers in Sydney reopened on October 11, on October 22 in Canberra and on October 29 in Melbourne – so, we are yet to see a full month’s worth of insights where lockdowns haven’t been a feature.

“There’s a lot of pent-up demand in those locations with consumers back out in droves, shopping and supporting their local businesses.

“Businesses will also have strong momentum behind them in the coming weeks leading up to Christmas, with consumers forecast to spend a record $5.4 billion in the Black Friday/Cyber Monday sales according to our research with Roy Morgan – so, there’s a lot to look forward to.

“Consumer sentiment is upbeat, and we’re set for a positive Christmas, despite the numerous Covid setbacks in 2021.”

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