Retail profitability in Australia has bounced back to pre-Covid levels for the first time since the pandemic began, the economic insights report released by the National Retail Association has been revealed.
The figures show the sector’s profits have increased by 4.9 percent year on year for the June quarter, following a significant hit to the sector in mid-2021 that led to many retailers closing their doors.
NRA Interim Chief Executive Lindsay Carroll said it was promising for businesses to see expenditure rise; however, the sector still has ways to go with inflation likely to have further impacts.
“This is a good result as it indicates retail is heading in the right direction after a tough few years, it is great to see businesses rebound from the dire situations they were thrown in,” she said.
“However, we must keep in mind that the increase in profitability is attributable in part to the rising costs of goods and services, rather than sales volumes.
“With inflation set to continue rising, retailers can expect some challenges to persist.”
The report measured sales to have risen by 0.3 percent, wages by 0.4 percent, and inventories by 1.3 percent in the June quarter.
“It is clear we still have supply issues to address, and our focus here should be on adopting the digital tools and systems to help small businesses remain competitive.”
The report also revealed a dramatic shift in the demographics of staff, with both unemployment and underemployment at record lows.
“The 30 to 34 age group, which was the 4th largest age bracket, has dropped by 21 percent in employment, in line with fewer manager roles being made available, which dropped by 11 percent.
“We now have greater diversity in age groups working in retail, with growth in both the 15 – 19 year and 45 – 49 year age brackets.”
“Coming into the busiest shopping season of the year, retailers need to consider these demographics and different types of workers to fill the roles they have available.”
“A steady increase in the older age brackets shows this group of Australians are able to fill the gaps in the labour shortage.”
The National Retail Association is the voice of modern retail, representing 60,000 shop fronts nationwide. It has been serving businesses in the retail and fast food sectors for close to 100 years.
Lindsay Carroll is available for interviews. Please contact the NRA’s media unit on 0467 792 013 or 07 3221 9222.