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The Impact of Coronavirus on Retailing in Australia

June 2020

The Coronavirus (COVID-19) pandemic has forced Australia’s government to enforce lockdown restrictions, which negatively impacted business and consumer confidence and supply chains. While the grocery sector and e-commerce experienced rapid increased in demand for products as panic buying escalated across the country, others have suffered a sharp decline. As the pandemic continues to unfold, retailers need to be prepared for long-lasting changes in consumer behaviour and shopping habits.

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Key takeaways

Retail is a cut-throat industry and especially during and after this pandemic, retailers must constantly redevelop and reinvent their brand, e-commerce and in-store strategies if they are to have any chance of competing in a dynamic and hypercompetitive retail environment.

Uncertainty dampens both business and consumer confidence. This lowering of confidence can become a self-fulfilling prophecy, with Australians and business deferring spending and investment.

Environmental concerns have taken a temporary backseat as health and hygiene are the main concerns during the pandemic. However, this does not mean an end to sustainability and there is likely to be a stronger and renewed interest among Australians in protecting the environment by shopping in a more sustainable manner.

The COVID-19 pandemic will bring about lasting changes in consumer attitudes and behaviour. Australians that previously preferred to pay in cash and reluctant to engage in e-commerce are increasingly likely to embrace these new payment trends.

E-commerce is flourishing in Australia but there are still questions to be answered and hurdles to be overcome if consumers will alter their shopping habits in the longer term.

 

Introduction

Scope
COVID-19 strikes economies differently than the 2008 financial crisis

Economic Outlook

Global economy will contract sharply in 2020
COVID-19 in Australia
Three scenarios examine the impact of a more severe outbreak
In our baseline view, the pandemic peaks in June 2020
The COVID-19 pandemic impacts both supply and demand in Australia
Euromonitor’s COVID-19 scenarios in Australia over 2019-2025 (1)
Euromonitor’s COVID-19 scenarios in Australia over 2019-2025 (2)

Retailing - Short-Term Impacts

Digital engagement with customers becomes main strategy
Increased proximity payments
Logistics disruption
Commercial rent battles

Retailing - Long-Term Impacts

Catalyst for the decline of physical stores?
Is environmental sustainability no longer a long-term concern?
Behavioural changes in the grocery sector

Retailing - Summary and Developments

Importance of fulfilment and last-mile delivery
Revitalising e-commerce strategies
Support local
Key takeaways

Conclusion

About Euromonitor International’s Macro Model
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