Retail sales retreated by 4.2 per cent in December from record-high turnover in November as Covid-19 restrictions limited household gatherings in some states and territories.
According to preliminary data published by the Australian Bureau of Statistics, falls were recorded in five of the six retail industries, led by household goods retailing which fell 9 per cent in December off the back of strong Black Friday sales in November.
Similarly, “other retailing”, department stores, and clothing, footwear and personal accessories, posted falls over the Christmas period after good gains in November.
Cafes, restaurants and takeaway food services was the only industry to rise.
Retail turnover remained 9.2 per cent higher than December 2019, suggesting that government stimulus payments and the unleashing of pent-up demand from shoppers were still driving the economy forward.
Over the December quarter, retail spending rose by 2.4 per cent, weaker than the 7 percent rise in the September quarter after the earlier Covid-19 lockdowns.
“The month-to-month data can be volatile, so we shouldn’t be disheartened by the fact retail turnover fell in December compared to November,” Australian Retailers Association chief executive Paul Zahra said.
“This is a fantastic result that’s allowed retailers to recoup some of the losses they incurred during the worst of the Covid lockdowns and restrictions in 2020, and it sets them up for a more prosperous 2021.
“Having said that, the threat of the virus remains, and even when the vaccine is rolled out we’re going to be living with Covid for some time, so some of the existing challenges will remain for retailers.”
In Victoria, retail spending fell by 7 per cent across December following a 22 per cent surge in November, while New South Wales also saw a 5 per cent fall, as localised restrictions in Sydney impacted retail turnover.
Confidence in the retail industry increased significantly from October to December—up nearly 70 per cent—the biggest increase in that period compared to all other industries, according to research house Roy Morgan.
Australia Post also reported December as its biggest month in history, with more than 52 million parcels delivered—a 20 per cent increase on the previous year.
The country’s second-largest shopping mall owner, Vicinity Centres, has cut 4 per cent—or $570 million—from the value as it comes to grips with the long term impacts of the pandemic.
The write-down now combines to an overall decline of 15 per cent across 2020 after the retail giant was battered by the sharp fall in rent collection during the initial waves of nationwide lockdowns.
Vicinity chief executive Grant Kelley said the effects of the pandemic, which continue to be felt into 2021, had resulted in Vicinity’s valuations softening.
“While we remain cautious on the impact of potential future outbreaks of Covid-19 on retail trade, and the challenges of the evolving retail environment, we are encouraged by a number of factors.
“Australia has been highly successful in containing Covid-19 outbreaks and shown that they are excited to return to their favourite retail destinations with customer visitation bouncing back strongly over the Black Friday and Christmas periods.
“Additionally, the Covid-19 recovery is expected to be further boosted by the national rollout of a vaccine which is anticipated in the first half of 2021,” Kelley said.
Major department stores and discount department stores that anchor large suburban malls continue to dial back their footprints as the increasing popularity of shopping online fundamentally alters the physical retail model.
Vicinity’s CBD assets, which include the Queen Victoria Building in Sydney and Emporium Melbourne in the southern capital, were hardest hit, with an 8.6 per cent fall in value over the last six months of 2020.
Regional shopping centres fell in value by 4.3 per cent while neighbourhood shopping centres faired better, with a loss of 1 per cent.