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December retail sales a welcome boost but omicron set to hit January spending

The latest Mastercard SpendingPulse data shows that Australian retail sales in December improved on the previous year as consumers took advantage of eased COVID restrictions, but retail outlets are not expecting the same results next month.

December retail sales a welcome boost but omicron set to hit January spending
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The data is collated from in-store and online retail sales across all forms of payment.

According to the latest data retail sales across the country increased 4.6 per cent in December compared to the same time the previous year and are up 10.4 per cent on pre-pandemic levels in 2019.

Household goods was the top-performing retail category, up 11 per cent in December compared to the previous year, with clothing up 7.7 per cent, the other strongest performing category. However, department store sales were down 3.2 per cent, mainly reflecting the reduced foot traffic in CBD locations.

All states and territories recorded an increase in sales in December compared to the previous year, with Victoria and Tasmania leading the way, both up 8.5 per cent.

However, Australian Retailers Association chief executive Paul Zahra said sales are likely to be impacted in the new year with omicron causing significant disruptions.

“The new year has delivered new challenges for retailers in the form of Omicron with tens of thousands of people being forced into isolation every day, and that’s taking a huge toll on the industry – and small businesses in particular, where just a few absences can wipe out an entire store’s workforce,” Mr Zahra said.

“Whilst Christmas and holiday spending has held up well in December, and improved on last year, we had yet to reach the peak of Omicron and consumers were feeling more confident while going about their shopping. The trading environment has changed significantly this month with positive Covid cases and staff shortages resulting in some businesses having to limit their trading hours or close stores altogether.

“We welcome the easing of close contact isolation requirements for essential food distributors, and other industries, but we’d like to see this expanded to broader retail to help with the staffing shortfall. Allowing foreign students to work extra hours is a positive step, along with visa fee rebates, but we need to get more people back to work sooner where it is safe to do so.

“The Omicron impacts are set to be ongoing and targeted support packages need to be considered by governments to assist small businesses through this latest challenge.”

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