Australia's peak retail body warns virus support is not enough

The Australian Retailers Association claims support is needed for small businesses in ensuring they can survive beyond the extended lockdown.

ARA's latest warnings are in response to latest retail trading figures published by the Australian Bureau of Statistics, which on Wednesday unveiled a 1.8 per cent fall in turnover for the month of June.

The monthly fall captures the initial impact of shutdowns impacting both Sydney and Melbourne. Association chief executive Paul Zahra said June's fall only represented the "tip of the iceberg".

"They don't yet reveal the blow caused by lockdowns in Victoria, WA and SA in July, current southeast Queensland restrictions, or the prolonged Greater Sydney lockdown," Mr Zahra said.

"The Delta variant has so far put around $12 billion of retail trade at risk, with a billion dollars at risk each week in Greater Sydney alone."

According to the bureau, turnover in Victoria and New South Wales fell 4 per cent and 2 per cent respectively. Hospitality and clothing retail recorded the biggest slumps.

Mr Zahra said current disaster payments were not enough and further measures such as rent relief and temporary flexibility in the Fair Work Act would assist in reducing the pressure.

"Battle weary retailers, who find themselves at the brink of emotional and financial collapse, need certainty," he said.

"We urgently need to see increased financial support and the reintroduction of tried and tested measures such as rent relief through the Leasing Code of Conduct, and temporary industrial relations flexibilities in the Fair Work Act to help keep staff on and kick start a business after shutdowns."

Analysis from Ernst and Young shows current lockdowns are likely to hit gross domestic by 2.5 percentage points, which will be more than enough contract growth during the September quarter.

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"Wednesday's data highlights just how quickly and forcibly lockdowns impact consumer spending, with the decline in sales in June in New South Wales particularly notable," EY economist Johnathan McMenamin said.

"Interestingly, while households pivoted to online shopping - which rose 12 per cent in June to be nearly 60 per cent higher than pre-pandemic levels - spending was all about food with sales of clothing and at departments falling sharply in the month."

Over the June quarter, retail sales rose 0.8 per cent.

Food retailing was the only spending category which sustained a rise and reflects the switch to more essential shopping patterns.

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