Australian retail saw a strong rise in May after the coronavirus battered the industry in April. But the question remains, will this growth be sustained?
In May 2020, Australian retail saw its largest seasonally adjusted rise in almost four decades, Inside Retail reported this week. According to the ABS, retail rose 16.3 per cent in the month. That’s around $4 billion, seeing the retail industry reach $28.8 billion while coronavirus cases re-emerge on the east coast.
Of course Australian retail’s horrific fall in April 2020 (of 17.7 per cent) teed up the May increase, after coronavirus lockdown measures eased and foot traffic resumed in bricks and mortar stores.
Customers have been hunting clothing, footwear and personal accessories, all of which saw more than 100 per cent monthly increases.
This is encouraging news for one of coronavirus’s biggest victims, despite Australian retail remaining 20 per cent down on the same period in 2019.
With most of us having recently put a cold draught beer or freshly made cocktail to our lips for the first time in months, it’s understandable restaurants and cafes have seen a similar trajectory.
Cafes and restaurants in May were 30 per cent up from April, but 30 per cent down from the previous period in 2019.
The health of the commercial real estate industry is a key indicator of economic growth, so buoyed retail activity is a positive sign for not only the property sector’s weaker asset classes but also the financial system and wider economy.
Meanwhile, industry leaders are keeping a level head on the May ABS results.
“These figures were recorded following the worse month on record in April 2020… The fact is many retailers are still struggling to cope following the economic impact of COVID-19 and Australia is entering its first recession since 1991,” National Retail Association chief executive Dominque Lamb said.
While JobKeeper and JobSeeker programs have done wonders to keep the retail industry afloat, Lamb reminds that these are temporary measures and further handholding is needed for the health of Australian retail.
“The NRA will continue to urge the Government to be judicious in when and how they unwind these schemes to prevent businesses closing and jobs being lost.”
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