By Wayne Cole
SYDNEY (Reuters) – Australian retail sales dived for a third straight month in August as half the population were trapped in coronavirus lockdowns, though reopening is in sight as vaccinations race toward world-beating levels.
The Australian Bureau of Statistics released Tuesday’s figures showing that retail sales dropped 1.7% to A$29.3 Billion ($21.27 Billion). This was a 1.7% decline in retail sales compared to July’s 2.7%, which beat the market expectations of a 2.5% drop.
A$360billion of the gross domestic product is consumed by the retail industry. Additional weakness can be expected as Sydney, Melbourne and Canberra are all in lockdown.
Although the economy is expected to contract sharply in this quarter’s third quarter, there are signs of relief with New South Wales only a few weeks away from lifting restrictions that will allow people to flock to get blasted.
It took almost 86% of NSW’s adult population to get their first shots. 60% have been double-vaccinated after an extremely slow start. The state will surpass Portugal, which currently has 84% of its population fully vaccinated by the end October.
Australia has 77% who have already received their first vaccination, which will see it surpassing the United States.
“At reopening, spending will be driven by pent‑up demand after months of lockdown and accumulated savings,” said CBA economist Stephen Wu.
We expect some bumps in the road as consumers may be cautious about contracting the virus, or coming into direct contact with it. This will lead to them being isolated.
The pandemic also accelerated online sales by both consumers and retailers. On-line food sales have increased by more than 50% compared to pre-pandemic levels. Fine dining restaurants can now sell take-out and ready-to-assemble gourmet meal plans.
This has helped hard-pressed department shops, with their annual sales growing by 50%.
NAB analysts estimate that Australians spent nearly A$51 billion online in the 12 months to August. This is a 30% increase over the previous year and double the level of the pre-pandemic.
But the bonanza is pushing up costs and straining supply chains. Australia Post announced that its busy day was over and advised people to get their Christmas shopping done early.
($1 = 1.3778 Australian dollars)
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. You should be aware of all the potential risks and expenses associated with trading in the financial market. It is among the most dangerous investment types.