We are almost at the end of the first full month of lockdown restrictions. The impact that COVID-19 has had on the retail sector cannot be overstated, even businesses that have been able to stay open have suffered the ripple effects to the economy.
Last week the Australian Bureau of Statistics (ABS) released preliminary retail figures for March. The report recorded the largest increase on retail sales for a single month on record. Although this would normally be wonderful news, as you’d all be aware it represents a false flag regarding retail’s fortunes.
The spike in turnover was due almost completely to the panic-buying at supermarkets that occurred in March, specifically on items such as toilet paper, rice and pasta. Meanwhile, sales across the rest of retail nosedived as restrictions began to be imposed and consumer spending plummeted. Many economists are already forecasting dire results when the April figures are released in June.
It’s for this reason that more still needs to be done to stop the economy from hurtling off the cliff. This led to the NRA teaming up with other industry associations to urge banking institutions to provide further relief to businesses and keep the economy moving.
Examples of practical proposals we have asked the banks to explore include the following:
- A freeze on interest accruals on business loans while lockdown restrictions remain in place and for a reasonable recovery period.
- A freeze on interest accruals on personal loans to benefit sole traders while lockdown restrictions remain in place and for a reasonable recovery period.
- A freeze on interest accruals on investments while lockdown restrictions remain in place and for a reasonable recovery period.
- Banks to lower interest rates on business loans until the end of the Covid-19 recovery phase (the first quarter of positive economic growth, following the removal of business restrictions).
- Banks to waive interest for landlords who have been forced to waive rent on properties they own until property owners can collect rent again.
- Banks to waive any establishment or service fees associated with business overdrafts until the end of the Covid-19 recovery phase.
- Banks to lower interest rates on business overdrafts until the end of the Covid-19 recovery phase.
- Banks to waive merchant terminal rental fees for all small and medium-sized businesses until the end of the Covid-19 recovery phase.
In the meantime, there are some positive signs on the horizon. The Queensland Government has announced an easing of some restrictions while other Premiers have made similar noises. The current situation across the country is as follows:
- Western Australia: Picnics, boating, hiking, camping and group exercise are back for Western Australians, and the Govenment is increasing its two-person limit on non-work activities to 10, providing people adhere to social distancing and good hygiene. Other restrictions related to restaurants, play equipment and travel bans remain in place. WA Premier Mark McGowan noted the state could see a jump in coronavirus cases as four international flights make their way to Perth.
- Queensland: Stay-at-home COVID-19 restrictions will be eased from Friday, but Queensland’s borders will remain closed. Family picnics and weekend drives will be permitted, and national parks will reopen next Saturday with residents directed to travel no further than 50km from their homes.
- Northern Territory: Parks and reserves across the Northern Territory will reopen from the coming weekend as Chief Minister Michael Gunner begins lifting restrictions imposed because of the global coronavirus pandemic. Mr Gunner will reveal more details on other moves later this week which is expected to include a reopening of some businesses in June, including cafes and gyms, but under strict rules.
- New South Wales: Two adults will be able to go and visit anybody else in their home on the basis of care, on the basis of reducing social isolation and improving everybody’s mental health. No limit has been placed on children. NSW Premier Gladys Berejiklian did caution that those aged over 70 should still stay home as long as possible.
- Victoria: Chief Health Officer Brett Sutton has said there is no intention to alter Victoria’s stay-at-home measures until the stat of emergency ends on 11 May.
- South Australia: Health Minister Stephen Wade said the Government was not looking at easing restrictions “any time soon”.
- Tasmania: Tasmania has two sets of restrictions – statewide rules and a second set of harsher restrictions for the northwest region where there has been an outbreak that started among healthcare workers. The northwest restrictions would be in place until at least 3 May, and the statewide restrictions would be revisited on 15 May, but people should not expect things to go back to normal.
- Australian Capital Territory: ACT Chief Minister Andrew Barr said some restrictions could be eased soon but wanted to stay in line with NSW as much as possible
Also, the Prime Minister has stated that If we are able to keep the infection rate at the same level of decline over the coming weeks it may lead to some restrictions being lifted in mid-May. It is probably going to be some time before we fully get back to life as normal, but if Australia can keep flattening the curve, that point will be sooner rather than later.
You will recall in late March, the NRA made the first of its submissions to the Fair Work Commission’s Annual Wage Review panel which increases minimum Award wages each year. We called for the annual wage review to be deferred, saying now was not the time to be thinking about increasing the cost of employing people. In this environment, retail business owners cannot possibly absorb a wage increase. Indeed, even the consideration of increasing wages at this point is merely adding more trauma and stress to what is already an extraordinarily difficult business environment for many small operators.
With the next round of submissions due in a matter of weeks, we need your help to collect data on the impact of Covid-19 to your business. The recent ABS statistics show a massive rise in retail sales across March but we know this is not the experience of the majority of our members and is skewed by the panic buying that occurred in the grocery sector. We need the data from our members to help support our further submission that the annual wage review should be deferred until such time as we have reliable data to help inform the impact of Covid-19 on our economy.
The survey takes 10-12 minutes and can be accessed here. Please share with other retailers in your network. It is critical that we get as many responses as possible in the next 2 weeks.
All the best for the week and keep well.