Retailers call for one plan

Lockdowns hurt August sales At this point, with Delta, we’re at our most difficult stage Coles CEO Steven Cain

COLES Group is bracing for “difficult months ahead” in the run-up to Christmas as it contends with severely disrupted supply chains and strict Covid rules that are forcing thousands of its staff into 14-day home isolation.

Speaking at a Trans-Tasman Business Circle event on Tuesday, Coles CEO Steven Cain revealed that 3000 of the supermarket giant’s staff were currently at home isolating, while many of its suppliers were also struggling with staff challenges due to the strict stay-at-home rules.

“At this point, with Delta, we’re at our most difficult stage,” he said. “Right now across the country we’ve got 3000 team members in isolation, which we have to manage, and then we’ve got a lot of our suppliers in similar situations … so thinking about how we plan for Christmas is really important.”

Victoria is just “at the start” of the staffing and supply challenges, he warned.

“We’re working with the six health authorities, the federal and the states and territories, to try and get consistent rules and regulations, particularly around where there’s been close contact,” he said.

“If a team member of ours has caught Covid outside of work, and they come into work, the whole shift goes down. So we lose 50 people at a time for 14 days, because one person has turned up.”

The retailer had had no known incidents of Covid being transmitted between staff members, he added.

“So we’re using facts to go back to the governments, and the NSW government has been excellent at re-looking at what makes a close contact, and what the subsequent events are.

“We’re working to get the rules changed so that if you are double-vaccinated and you’re being tested, you can still turn up for work.”

It would be “another couple of difficult months ahead” until the nation got above 80 per cent fully vaccinated, he warned.

Alongside the supply chain and staff challenges, Coles is also feeling the impact of restrictions currently in place for the construction industry.

“We’ve got hundreds of millions of dollars of projects, almost frozen at the moment ... because of construction stoppages or delays,” he said.

His comments came as billionaire retailer Solomon Lew has doubled down on calls for extra Covid-19 security measures to be implemented in shopping centres, urging state governments to step in and mandate the use of Covid-Safe check points.

Mr Lew, who last week warned shoppers would stop visiting the country’s malls

unless there was more certainty around vaccinations and temperature checks, has again voiced his concerns following the announced easing of lockdown restrictions in NSW.

Mr Lew, the chairman of Premier Investments which owns retail chains such as Smiggle, Portmans and Just Jeans, said a state government-led plan could act as a “national template” to introduce consistency in shopping centres across the country.

“A standardised set of measures applied consistently across centres will provide much needed confidence for customers and retail employees as well as certainty for landlords and retailers,” he said. “It’s no use having a patchwork of guidelines by state or by store.”

Premier Investments shares closed 0.4 per cent down at $29.60 as most of the retail sector finished in the red. Harvey Norman lost 1.4 per cent to $4.94, JB Hi-Fi fell

1.5 per cent to $44.35, while Woolworths dipped 1.95 per cent to $38.30 and Coles slumped 2.8 per cent to $16.54 as the ASX 200 tumbled 1.5 per cent to 7275.6 points.

Australian Bureau of Statistics figures, released on Tuesday, showed retail turnover dropped by 1.7 per cent to $29.3bn in August – down 6 per cent from the recent peak of $31.2bn in May.

It was the third consecutive monthly fall in turnover. Spending in NSW dropped by

3.5 per cent to its lowest level since April, 2020.

With NSW, Victoria and the ACT only beginning to lift lockdowns from October, economists expect September will be another tough month, but they remain optimistic of a sharp rebound in spending leading up to Christmas.

The hardest hit sector in August was clothing, footwear and accessories, where sales in August plunged by 16 per cent, followed by a 10 per cent drop in department store

spending, and a 7 per cent fall in cafes, restaurants and takeaway services. Spending in all three segments is now about a fifth lower than in February 2020, before the pandemic struck. CommSec chief economist Craig James said consumers are looking forward to an end of lockdowns, with confidence lifting in line with vaccination rates.

“It is reasonable to expect that Aussies will celebrate with a good dose of retail therapy,” he said.