Lockdown a Tale of Two Retails

Retail Turnover

“Retail sales in Australia recorded the worst result on record in the September Quarter 2021, falling 4.4% as the lockdowns in Sydney, Canberra and Melbourne dragged on longer than 2020”   AFR 5/11/2021

The fall in retail trade was 0.9% steeper than 2020,  declines in social spending were not offset by last years grocery stockpiling, work from home set-ups , home improvements and no job keeper.

Nationally Department stores, hospitality and apparel retailers were the worst performers all down between  17% and 20% down on pre-pandemic levels.  

In June, we were all starting to feel more confident of a revival –  then Melbourne and Sydney locked down, followed by ACT and well the rest is shown below.  This  chart shows just how deep the drop in turnover was, deeper than the pain of 2020. 



Online Retailing

Total online retailing sales were $4,341.4m in September 2021, in seasonally adjusted terms. This was the highest level for the monthly online retail sales in the history of this series, exceeding last month’s record result. In seasonally adjusted terms, the 3.4% ($143m) rise in September has added to the double-digit growth seen over each of the last three months, where lockdowns in New South Wales, Victoria and the Australian Capital Territory boosted online activity.

The big growth jumps driven by lockdown are very evident from March 2020 –  and July 2021.


Things are about to bounce back, CBA saw 18.6% growth in card spending for the week ending 29th October –  the first week free of harsh restrictions. CBA advise that spending has all but recovered to pace before lockdowns.   CBA also reports that households are sitting on $200 billion in additional savings stashed away during the pandemic and the government predict this cash  will act as a rocket under the economy – with NAB economist Taylor Nugent predicting a sharp bounce in quarter four data and activity likley to rebound to pre-lockdown levels by Q2, 2022.

Both onliners and traditional real-estate based brand retailer  have some challenges ahead.  Onliners for the next 6 months will likley be  put on-boarding and retention programs ahead of growth strategies, and create repeatable online habits or potentially lose their pandemic windfall clients  – who most likley product purchased in the pandemic with little or no brand value recognition.

Constrast the challenge for thise with real estate at their core,  bricks and mortar retailers who traditionally have a more aggressive promotions and advertising budget and will be doing everything they can to decouple you from your recently and somewhat forced  online habit and be spending big to bring you back to their stores.

As we head to Q2 2022,  the battle lines will be drawn. 


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