Melbourne retail sales have rebounded strongly after the city reopened following 12 weeks of hard lockdowns.
According to data from the Melbourne-based Kepler Analytics, which users sensors to monitor in-store movement and activity, retail sales lifted by 37.5 per cent over the eight days of trading days since Victoria's reopening.
Over the last week, sales conversion lifted 180 per cent while transactions increased by 25 per cent, despite a huge reduction in comparative period traffic.
“The reason for growth is not traffic,” Kepler Analytics managing director David Mah said.
“Shoppers are not rushing back to the shopping precincts to browse and while away the day.
“We can draw a conclusion that the people in the shopping precincts are entering with more intent and lists most days.”
Kepler found that outside foot traffic—the number of people passing retail stores—remained down 40 per cent on the same time last year while inside foot traffic—the quantum of people entering stores—also remained depressed.
The shift in shopping habits triggered by the pandemic has continued to have ramifications not only for retailers but landlords and investors.
Retailers hurt by the pandemic, and those seeing a shift away from bricks and mortar sales to digital, are not only seeking rent relief but a move towards shorter-term leases and rents based on a percentage of sales, rather than foot traffic.
Landlords are also eyeing the growth in e-commerce and are keen to clip the online ticket.
Victoria is now the only state or territory where retail trading lags last year's levels.
Following a 12.6 per cent fall in August when the stage four restrictions in Melbourne were introduced, Victoria recorded only a small monthly fall across September.
Recent figures released by the Australian Bureau of Statistics revealed that retail turnover for the month of September fell 1.1 per cent nationally in seasonally adjusted terms compared to figures recorded over August.
However, at $29.1 billion for the month, they remain ahead of the $27.6 billion recorded in September last year.
The ABS said the fall in monthly retail turnover was largely due to falls in food and essential goods consumption, but cafe, takeaway and restaurant services rose 3.5 per cent, while department store retailing rose 1 per cent.
Despite the fall in September, retail trade added around 1.4 per cent points to GDP growth across the September quarter, posting their biggest quarterly percentage gain since records were kept in 1983, lifting by 6.5 per cent.
ANZ economist Adelaide Timbrell said while retail sales had lifted in recent months, overall household consumption was unlikely to be quite as strong because people were still spending less on services such as entertainment and travel.
“We expect to see retail’s share of household spending to be elevated through fourth quarter as the reopening of Melbourne is likely to have a considerable positive effect,” Timbrell said.
Combined with the Reserve Bank’s recent interest rate cut, which has rekindled consumer confidence, economists are now eyeing the approaching holiday shopping season which they expect will bring a wave of reprieve to businesses impacted by the pandemic.
Uncertainty has also continued to surround the state budget with premier Daniel Andrews declining to say when it would be delivered.