How will Victoria’s stage 4 restrictions change lockdown consumer spending this time?
Link copied to
The first time Australian states went into lockdown it drove a $2.4bn e-commerce boom, but while a second lockdown in Victoria is expected to maintain the momentum for online sales, consumers are also expected to tighten their belts further.
Mark Harrison, a partner at accounting firm Pitcher Partners, believes there is “an overwhelming sense of more cautious saving and conservative behaviour”.
“Look at what some of the online spending was the first time — such as setting up home offices — that won’t repeat this time,” he told Stockhead.
“I think if you’re in fashion retail there’s anecdotal stories about people buying clothes to wear at home. They now have that casual wear, they have their home office set up and hobbies they piled into the first time.”
Harrison expects it will be much of the same in terms of the migration to online sales, but some companies are better placed to capitalise on it this time around.
“You’ve also got some businesses that are better established for it now than they were in the first lockdown,” he said.
“So there’ll be those who have actually invested in online or learning to use it. They’ll continue with that build, because it is a slow build for anyone who has moved online or established an online presence.
“The others with already established online businesses will reap the rewards they reaped last time.”
Harrison warned though that some businesses that survived the last lockdown may not come out of it this time, with the heavier restrictions in place.
“For some people they’ve been working remotely since March,” he noted. “Some people probably worked through COVID one, but maybe not this lockdown as well during the breadth of it.”
But spending won’t completely dry up.
“I think the psychology might stop the propensity to spend a little bit but ultimately, people consume,” Harrison said.
“There will be a shift from one channel to the other.”