Retail Records Worst-Ever Monthly Decline

Bricks and mortar stores have continued to suffer during Covid-19 lockdowns, recording the worst-ever monthly decline over April.

The latest ABS figures show retail trade falling a seasonally-adjusted 17.7 per cent over the month of April after a record jump of 8.5 per cent in March thanks to pandemic-induced panic hoarding.

The collapse, driven by strict social distancing rules from mid-March to contain the Covid-19 pandemic, was felt heavily across the food retailing industry experiencing a slump of 35.4 per cent, following a 24.1 per cent rise in March.

All states experienced dramatic slumps in retail activity as the early impacts of the health crisis start to set in with Victoria seeing falls of 21.1 per cent, New South Wales 17.5 per cent and Queensland 15.7 per cent.

Queensland was the first state to announce the restart of non-essential shopping last month, however the situation remains inconsistent across the country.

CommSec chief economist Craig James said the lift in consumer confidence over nine straight weeks, spurred by workers returning after lockdown, had seen more stores re-opening.

“There are reasons for optimism for retailers,” James said.

Scentre Group, which owns and operates all 37 Westfield shopping centres across Australia, said more than 70 per cent of stores in all centres were now open thanks to eased restrictions.

The shopping centre landlord last month noted a marked improvement in foot traffic over the month of May.

According to the NAB Online Retail Sales Index, sales surged in April to a 16.2 per cent gain on a month-on-month basis, the biggest lift in online sales growth over a month since the index began in 2012.

The recovery was driven by an appliances and homewares boom, growing at a pace slightly faster than the broader index.

In year-on-year terms, the index grew by 58.5 per cent in April, the highest year-on-year growth rate comparison in the series’ history.

In the twelve months to April, NAB estimates Australians spent $34.27 billion on online retail, around 10.4 per cent of the total retail trade estimate, and 19.5 per cent higher than the previous 12 month period.

NAB chief economist Alan Oster said the rapid growth now meant online as a proportion of total retail sales reflected 10.4 per cent of all sales, up from 9.7 per cent a month prior.

“While official preliminary estimates for all retail sales showed a marked reversal of gains in March, our online series indicates that online spend accelerated in April.”

“In an ordinary month, growth recorded by international retailers would itself be viewed as strong, but in April, domestic retailers recorded exceptional, double-digit growth.”

All eight categories within the NAB index recorded sales growth in month-on-month terms.

Economists at UBS now estimate that the crisis-induced uptake in online retail will now see the online market penetration climb to 17 per cent by 2024.

Rent collection halves

According to figures release property management software Re-Leased, retail landlords across the country have collected half the month's rent from tenants with many only just opening their doors again after many of them spent weeks shuttered.

The Re-Leased findings are based on anonymised and aggregated data of debt collection performance from over 21,000 properties and 40,000 unique tenancies managed by its Australian commercial property clients.

The software platform reported that just 50 per cent of retail payments were received by the end of May, compared with the usual 84 per cent by this date.

Across all property sectors 67 per cent of rent has been received with 89 per cent of rent, on average, received at this time of the month.