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Container ships wait off the coast of the congested Ports of Los Angeles and Long Beach in Long Beach, California. Source: Reuters
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  • Retail sales continue to ramp up around the country in the lead-up to the Christmas holiday period, but consumers may be left high and dry by global supply chain shortages
  • New data from Mastercard SpendingPulse shows retail sales grew by 4.2 per cent across the country compared to the same time last year
  • The October year-on-year growth was primarily driven by states that have managed to avoid lockdowns over the past several months
  • However, on the other side of a rebounding retail sales sector is a global supply chain wrought by a shortage of empty sea-going containers
  • Vinh Thai, an Associate Professor from RMIT University, says he has “no doubt” Australians will experience product shortages and higher prices for certain goods

Retail sales are continuing to ramp up around the country in the lead-up to the Christmas holiday period, but consumers may be left high and dry by global supply chain shortages.

New data from Mastercard SpendingPulse shows retail sales grew by 4.2 per cent across the country compared to the same time last year, and up 10.1 per cent compared to October 2019 — before the pandemic struck.

The Mastercard data, which measures both in-store and online sales across all forms of payment, shows that the October year-on-year growth was primarily driven by states that have managed to avoid lockdowns over the past several months.

Queensland retail sales were up 5.3 per cent, Western Australia sales 5.2 per cent, South Australia 3.5 per cent, and Tasmania 4.7 per cent.

The story was different for Victoria, New South Wales, and the ACT, however, which have been slowly easing out of their latest round of COVID-19 restrictions since the beginning of October.

Despite retail stores reopening fully in NSW and the ACT in October, sales remained subdued, down 1.1 per cent and 12.2 per cent, respectively.

In Victoria, retailers only opened towards the end of October, but sales still grew by 12.4 per cent compared to the same time last year. It’s important to note Victoria was in the midst of its second-wave lockdown during October last year, so the data is somewhat skewed.

Across the nation, household sales drove the bulk of the growth, up 14.2 per cent compared to October last year. This was offset by a sharp downturn in department store sales of 12.3 per cent.

Australian Retailer Association CEO Paul Zahra said the October sales stats point to a “positive” festive trading period.

“Department stores have recorded five consecutive months of negative sales growth, driven by the lockdown of Australia’s two largest cities. However, we are hopeful of a strong finish to the year,” Mr Zahra said.

“Christmas is a time when department stores shine with customers set to return in greater numbers to physical stores.”

He said with retailers in Sydney, Canberra, and Melbourne only reopening sporadically in October, Austalia is still yet to see a full month’s worth of insights for lockdown-free trade.

“There’s a lot of pent-up demand in those locations with consumers back out in droves, shopping and supporting their local businesses,” Mr Zahra said.

“Consumer sentiment is upbeat and we’re set for a positive Christmas, despite the numerous COVID setbacks in 2021.”

Supply chain struggles

On the other side of a rebounding retail sales sector is a global supply chain wrought by a shortage of empty sea-going containers, impacting both merchants and consumers in the lead-up to Christmas.

Vinh Thai, an Associate Professor from RMIT University, said he had “no doubt” Australians would experience product shortages and higher prices for certain goods.

“The current shortage of supply is largely due to a shortage of empty sea-going containers, as most consumer products such as electronics, clothing, and white goods are transported on these containers,” Mr Thai said.

“Increasing supply capacity requires investment in infrastructure and this takes time.”

Products that require chips — like some cars, graphics cards, and video game consoles — are in particularly short supply.

“There is currently a backlog of empty containers at container parks in Australia, which desperately need to go back to the high-exporting countries but have no ships to take them,” Mr Thai said.

“The economic recovery in the aftermath of the COVID-19 pandemic will be slowed down due to current supply chain issues.”

He explained that a “perfect storm” of factors have compounded on the logjam of sea-going containers to exacerbate supply woes, including a reduction in port workers and vessel crews, a diversion of money that would normally be spent on tourism to electronic goods for work or entertainment, and industrial action at parcel delivery companies.

Mr Thai’s advice to shoppers in the lead-up to Christmas was simple: “If you’re thinking about ordering items for Christmas, do so as early as possible.” 

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