Aussies are still shopping! Retail sales have well and truly recovered from COVID decline
Deloitte’s latest quarterly Retail Forecasts report finds that Australian retail sales have come out of the pandemic better off than if it had never happened.
Retail spending is about 6% ahead of its pre-COVID trend (the level of spending which was expected if COVID disruptions had not occurred), as per Deloitte’s numbers.
So, what exactly are the post COVID retail trends?
Retail spending surged at the end of 2021 and a further 1.2% gain in real turnover followed in the March quarter 2022.
According to Deloitte, these retail surges are likely the result of returning mobility, record employment and pent up demand. These factors are predicted to drive further gains over the second half of the year. In addition, the cooler weather is likely to motivate people to upgrade their wardrobes this season after the last two winters were spent mostly inside due to lockdown.
It is also expected that spending patterns will remain more consistent from now on, however there are new challenges that are predicted to start impacting the Australian retail industry.
David Rumbens, Deloitte Access Economics partner says, “The growth outlook is positive, but it still presents a number of challenges for retailers.”
How will the cost of living crisis impact retail spending?
The cost of living crisis is causing anxiety amongst many Aussies but it’s not known how this will impact future retail spending.
While supermarkets are the retail category seeing the biggest impact so far, customers are also noticing a price increase on non-food purchases. Even apparel and department stores, which have traditionally seen lower levels of price inflation than other retail sectors, are seeing price rises.
Deloitte has found that overall price growth is up 2% over the quarter and 5.2% over the year.
“Overall, the cost of living squeeze, higher interest rates and preference for spending on services are expected to lead to a slowdown in retail momentum through the second half of 2022,” Rumbens says.
While the pinch of rising costs is being felt broadly, there is still a chance to save money here and there. If you’re in a position to make a purchase, check out our list of EOFY sales that are currently taking place.