Last week the Australian Bureau of Statistics (ABS) released its retail trade report for December 2019 and the results were rather mixed. Although a drop in turnover of 0.5 per cent (seasonally adjusted) certainly does not sound ideal, the figure needs to put into a broader context. Given the November 2019 report revealed a massive spike in sales of 0.9 per cent, the Christmas trade period clearly was still incredibly busy.
What this demonstrates is not that Australian’s aren’t splashing the cash at Christmas time, it’s just that they’re doing it at a different time. New shopping events such as Black Friday and Cyber Monday have been embraced by both retailers and shoppers. The ability to make a dent in Christmas shopping early and at bargain prices is something that has proved compelling for consumers. The take home message for retailers is to understand that consumer behaviour is changing when it comes to Christmas shopping and to factor that into your strategies during the holiday season.
But there’s no denying that retail is far from out of the woods. Just last week Colette by Colette Hayman became the latest established brand to be placed into voluntary administration. It’s terrible news for the 300 employees operating across the chain’s 140 stores nationwide.
In the past 12 months we’ve seen businesses spanning the entire retail sector close their doors and there are concerns that there will be more to come. Although it is true that there is no silver bullet to turning things around, there are options available to all levels of government.
For instance, last week I joined with the Brisbane Lord Mayor, Adrian Schrinner, to help launch their Suburban Shopfront Activation initiative. The scheme brings together property owners with vacant spaces and new small businesses requiring a temporary office. Participants are then eligible for a grant once they enter into an occupancy agreement. It’s a pretty simple initiative and alone won’t provide the panacea to suburban retail shopfront vacancies, but it’s a proactive measure that will reduce the number of unused spaces and will hopefully brush away the tumbleweeds.
Respective state governments and the Commonwealth also need to explore simple but effective policy solutions to boost consumer spending. Retail is the second largest employer of any industry, so when we struggle it’s fair to say the rest of the economy is as well. Both levels of government need to start canvassing options available to them and start pulling economic levers at their disposal to unshackle the retail sector. We don’t want another repeat of 2019, with a different business falling over on a regular basis, and now is the time for decision makers to be proactive.
Have a great week!