Omicron Impacting Consumer Confidence Following Pre-Christmas Splurge
November records overshadowed
Australians enjoyed record spending over black friday, boxing day and in the weeks leading up to Christmas. However, the emergence of Omicron has abruptly shifted the lavish living.
Figures from the Australian Bureau of Statistics show Aussies splurged during November, celebrating the end of pandemic lockdowns with a jump of 7.3% in retail turnover.
It marked the fourth-largest monthly rise recorded, boosting overall sales to a high $33.4 billion.
Australian Retailers Association CEO Paul Zahra said November was a strong month for retailers, with Christmas gifts and post-lockdown buying setting records aplenty.
However, Zahra is adamant that new challenges will emerge as Omicron cases rise nationwide.
“We’ve entered new territory in the pandemic with Omicron decimating workforces and impacting supplies and deliveries of essential goods,” Mr Zahra said.
Economists believe consumer caution due to case numbers will lead to less in-store traffic, resulting in overall supply chain issues and staff shortages.
CommSec chief economist Craig James said Australians were comfortable spending from home, with many enjoying a holiday over the festive season.
“Omicron cases are expected to peak in most states in the next few weeks and then both herd immunity and the high vaccination rates are expected to kick in, reducing the strain that is currently being felt by the health system. Aussie consumers are alert, not alarmed.”
ANZ head of Australian economics David Plank said consumer confidence typically improves at the start of each year, and he expects a rebounding period to arrive once again.
“The rapid rise of Omicron cases across Australia is likely responsible for the dampened outlook in the first week of January. Confidence fell in all the major capitals, with Adelaide faring the worst,” he said. “The good news is that people are still relatively happy about their own financial circumstances. This potentially sets things up for a rapid rebound once people are more confident about health outcomes.”
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