Remarkable Journeys with Jess Fox: Conversations with our clients, people and community. Listen now.
30 Oct 2020 3 min read
The data we have from the last 10 years in our ‘Federal Budget: A 10 year retrospective’ demonstrates quite clearly that retailers live or die on their commerciality. In terms of investment, the data we have is from the Department of Industry, Innovation and Science – primarily relating to consumer products rather than retail trade.
Where the Government has historically intersected with the sector – and will continue to do so – has been around industrial relations, particularly as the sector employs more young people than any other sector, and also has a large proportion of the nation’s part-time and casual workers. In a sector under threat, that is a large number of jobs to be displaced.
The reality is, COVID-19 has only sped up changes that were already afoot in the industry. What’s happened in the last six months is that there are fewer people in shops, and more people online. But retailers and consumers alike are changing the way they interact and operate. The tenancy mix has changed. We’ve seen a surge to online, and retailers meeting the demand by investing in their online operations.
The Federal Government has done a good job in providing stimulus to both consumers and retail businesses to spend, although the recovery will not be an even one. Some states like Queensland and Western Australia are already performing well, whilst others – notably Victoria – remain in the midst of heavy COVID-19 regulations. But retailers are resilient. Targeted investment in digital and online can be written off the same year under the new guidelines, improving cash flow. Consumers should be buoyed by the extra cash in their pockets and feel confident to spend. Rebuilding consumer confidence will be a long game played by both policymakers and retailers.
In our report we cover:
We were initially writing the ‘Federal Budget: A 10 year retrospective’ report before COVID-19 as an advocacy piece for more industry investment and support. Of course, the way the year started is not the way the year is ending. Many sectors that had been left to their own devices are now key for our recovery. Sovereign capability. Jobs. Digital economy. Modern manufacturing. Renewable future. Deregulation. Innovation. These are the terms we will use as we settle into COVID-normal.
Our report looks retrospectively at 13 different industries, the investment made into them by Government and their contribution to GDP. This is then overlaid with the opportunity we see for industry in this new normal based on recent Government announcements.
With the Australian economy the weakest it has been in 23 years, Labor has handed down its third Federal Budget delivering its second consecutive surplus, and setting the Government’s agenda as we head into an election cycle.
COVID-19 has changed the way we shop – perhaps forever. There is no retailer unaffected. But while many in the industry are experiencing hardships they might never bounce back from, it’s not all doom and gloom.
While many retailers have opted to close their doors and wait out the storm, there are those that have pivoted and innovated to emerging customer demands – with sales for camping gear, exercise equipment, home entertainment and arts and crafts going through the roof.
There is an overlooked economic opportunity in Australia’s mid-sized businesses – with the right incentives and tax policies in place, they can grow in size, scale and reach. They can employ more people, collaborate with other Australian businesses, and better contribute to Australia’s bottom line.