Retail in Australia Today

How to Manage COVID-19 Disruption and Make it to the Other Side

Corporate Finance & Restructuring | Retail & Consumer Products

May 13, 2020


Shopping with friends or family has been firmly placed on the list of prohibited activities by the Federal Government in response to COVID-19, yet it was a normal part of daily life only a short time ago. COVID-19 has shuttered vast portions of the retail sector and the economy more broadly, with Treasury estimating over 800,000 businesses will qualify for the Federal Government’s JobKeeper program as a result of significant declines in revenue.

Australian retailers have been adapting to a changing landscape for some time, including responding to unforeseen events such as last summer’s bushfires. The enormous disruption of COVID-19 is the final obstacle that many retailers will struggle to navigate. Few, if any, will have planned for such an event that for many has closed the entire store fleet for weeks, if not months.

Essential vs. non-essential businesses

The Federal Government has not mandated the closure of any retail business, although the divide between the “haves” and “have nots” continues to grow. Although retailers classified as essential have been impacted by the pandemic, they can still maintain some operations and preserve cash flow. A handful of essential retailers — notably supermarkets — are even managing to grow during this time of crisis.

The reality is starkly different for retailers deemed nonessential, with many household brands having closed their doors and relying solely upon online trade to survive. For those that are attempting to continue to trade through their stores, footfall appears well down with Google’s April Mobility Report suggesting that visits to retail locations are down by between 24% and 49% across Australian states and territories.

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