A retail recession is on the cards when JobKeeper ends, with new spending data pointing to shy shoppers and weak sales growth, The New Daily reports.
Victorians drove a 2.5 per cent increase in retail trade volumes in the December quarter, but sales went backwards everywhere else across the nation.
That’s according to ABS figures, which confirmed retailers had a lacklustre Christmas after a mammoth November.
December sales fell 4.1 per cent, an adjustment on earlier estimates.
Lower spending was felt in all major categories except cafes and restaurants, which enjoyed a 3.2 per cent bump in December as brunch-goers shrugged off lockdowns in NSW.
Household goods (down 8.3 per cent) and fashion (down 9.4 per cent) were particularly weak in December, although Indeed APAC economist Callam Pickering said that’s expected after a bumper November.
The real concern, Mr Pickering said, is a considerable slowdown in retail trade over 2021, which could even spark a retail recession.
“Spending in recent months entirely reflects the re-opening of Victoria … there is no retail momentum in the rest of Australia,” he said.
“[We] cannot discount the possibility of a retail recession given the combination of low wage growth, low population growth and the diminished impact of Victoria’s economic re-opening.”
“The current rate of annual growth [6.4 per cent] is also unsustainable, particularly once JobKeeper and JobSeeker [supplements] are removed.”
There are already signs Victoria’s retail renaissance is winding down, with turnover decreasing 6.8 per cent across the state in December.
Monthly retail spending also fell 4.9 per cent in NSW and 1.8 per cent across Queensland, leaving the Northern Territory (up 1.1 per cent) as the only jurisdiction to record a positive result.
BIS Oxford chief economist Sarah Hunter was more optimistic, saying consumer spending is returning to form after COVID-19.
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‘Retail recession’ looms when JobKeeper ends, economist warns (The New Daily)
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