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Confidence cops whack as rampant Omicron takes toll on retailers

Business

Just as the omicron variant was knocking on the door, Australia’s retail turnover was on the cusp of a boom with a rise of 7.3 per cent in November, according to Australian Bureau of Statistics data.

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This followed a rise of 4.9 per cent in October and 1.3 per cent in September.

It was the fourth strongest monthly rise in the series and retail sales were the highest level ever recorded, up 5.8 per cent on the previous record set in November 2020.

But then consumer confidence was hit with the omicron variant and according to the Roy Morgan-ANZ consumer confidence survey, things took a hit by mid-December, when they should have been surging upwards.

It found consumer confidence was 2.2 per cent lower than a survey conducted on December 18 and 19 “as Omicron cases surged in all states and territories other than Western Australia’’.

Sentiment in the current economic conditions’ decreased sharply by 8.7 per cent to the lowest level since September 2021.

The question of whether it was a good time to buy showed consumers had already decided that it wasn’t. The index for that question fell almost 5 per cent.

ANZ head of economics David Plank said Consumer confidence began the year on a downbeat note.

“The rapid rise of Omicron cases across Australia is likely responsible for the dampened outlook in the first week of January,’’ he said.

“Confidence fell in all the major capitals, with Adelaide faring the worst.

“Over the decade from 2011 to 2020, consumer confidence has risen 2.6 per cent on average in the first survey of January compared to the last prior to Christmas

“So this result is even weaker than it seems. Consistent with the drop in confidence, ANZ-observed spending is at its lowest since the Delta lockdowns.

“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 outcome.’’

 

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