Retail sales rebound in October

The Mastercard SpendingPulse™ survey that measures in-store and online retail sales across all forms of payment found that retail sales across the country increased 4.2 per cent in October compared to the same time last year and are up 10.1 per cent on pre-pandemic levels in October 2019.

The states that have been living free of severe restrictions continue to record positive sales growth with Queensland (up 5.3 per cent), Western Australia (up 5.2 per cent), South Australia (up 3.5 per cent) and Tasmania (up 4.7 per cent) when compared to October 2020.

Despite the October reopening of retail stores in NSW and the ACT after prolonged lockdowns, retail sales remained subdued, down 1.1 per cent in NSW compared to the same time last year and down 12.2 per cent in the ACT.

Victoria, where retailers reopened at the end of October, saw an increase in sales of 12.4 per cent compared to October 2020, however that’s compared to their 100-plus-day second wave lockdown last year.

Department stores recorded another sharp downturn in year-on-year sales (down 12.3 per cent) in October. However, there were marginal increases in sales of clothing (up 0.8 per cent) and food (up 1.7 per cent), while household goods experienced 14.2 per cent growth in sales compared to October last year.

Australian Retailers Association chief executive Paul Zahra said with 39 days to go to Christmas, and the worst of COVID now behind us, retailers are ramping up their operations and are looking forward to a positive festive trading period.

“Whilst it’s encouraging to see retail sales overall on the rebound in October, the results are mixed across the different categories and the states and territories,” Mr Zahra said.

“Department stores have recorded five consecutive months of negative sales growth, driven by the lockdown of the Australia’s two largest cities, however we are hopeful of a strong finish to the year.”

Christmas is a time when department stores shine with customers set to return in greater numbers to physical stores.

“Retailers in Sydney reopened on October 11, on October 22 in Canberra and on October 29 in Melbourne – so we are yet to see a full month’s worth of insights where lockdowns haven’t been a feature,” Mr Zahra said.

“There’s a lot of pent-up demand in those locations with consumers back out in droves, shopping and supporting their local businesses. Businesses will also have strong momentum behind them in the coming weeks leading up to Christmas, with consumers forecast to spend a record $5.4 billion in the Black Friday/Cyber Monday sales according to our research with Roy Morgan – so there’s a lot to look forward to. Consumer sentiment is upbeat and we’re set for a positive Christmas, despite the numerous Covid setbacks in 2021.”