LJH Commercial

1. 4 Sector Trends Retail Market Monitor | 1st Half 2021 The online shopping trend accelerated at an extraordinarily fast pace over 2020 in Australia. While lockdowns last year forced many consumers to make their purchases online, it appears that many Australians are choosing to continue to do part of their shopping online, even though shopping centres are broadly back to normal trading conditions. Online shopping & what it means for retail property Category % of total online sales in 2019 % growth over 2019 % growth over 2020 Variety Stores 35.5% 22.3% 27% Fashion & Apparel 27.2% 21.0% 40% Home & Garden 10.6% 10.5% 48% Health & Beauty 8.3% 12.4% 30% Media 6.9% 7.3% 36% Hobbies & Recreational Goods 7.0% 6.1% 20% Specialty Food & Liquor 4.5% 9.4% 50% The Inside Australian Online Shopping eCommerce update (Feb 2021) released by Australia Post gives us a good insight in to just how much the consumer landscape has changed. In January 2021, national online purchases grew by 44% year-on-year. Over 5.2 million households made a purchase online in January 2021, which is on par with the figures recorded in the early months of the pandemic. This again highlights that many households are making online shopping a permanent feature of their consumer spending. In 2019, over half of all online purchases were in the Variety Store and Fashion & Apparel categories. These two categories also recorded by far the strongest growth in online sales over 2019. In 2020, Home & Garden and Specialty Food & Liquor were easily the biggest categories for growth, although we would expect this growth trajectory to settle back to much lower levels over 2021 (assuming no further lockdowns). The categories that have a strong presence in the Large Format Retail space (e.g. Supermarkets, hardware, liquor, chemists, recreational/camping stores) are easily the most resilient categories to online shopping, and these categories make up a relatively small proportion of total online sales. While online shopping is certainly a growth phenomenon in Australia, the rate of growth will slow down dramatically in 2021 as our need to socially distance from each other dissipates. Already we are seeing this trend play out in ABS Retail Trade data. In January 2021, the proportion of all food sales in Australia done online was 5.2%. While this is higher than January 2020 (2.8%), it is lower than the peak month recorded in August 2020, when it was 5.8%. In total, according to the ABS, 9.1% of all sales in Australia in January 2021 occurred online, versus 6.3% in January 2020. Source: Australia Post, eCommerce report February 2021, 2020 eCommerce Industry Report 1 ABS, Online sales, January 2021 – Supplementary Covid-19 Analysis 1