“Like a zombie movie”: As Sydney retailers brace for a $2 billion blow, experts call for vaccines to ensure long-term survival

covid-19 economists lockdown

Source: Unsplash/Laura Cros.

Sydney’s latest lockdown could cost retailers upwards of $2 billion, and some of those affected say ramping up the vaccine rollout is the only way to ensure the survival of small businesses in the long term.

Over the weekend, the New South Wales government announced a two-week stay-at-home order for Greater Sydney, the Blue Mountains, the Central Coast and Wollongong, to prevent further spread of COVID-19 in the state.

That means non-essential retailers in these areas have been forced to close — a blow that the Australian Retail Association (ARA) says could cost retailers upwards of $2 billion in lost trade.

Even for those businesses that can still open, the stay-at-home order simply means there will be fewer people out shopping. 

It also means a halt in tourism over the school holiday period that would usually see Sydney’s tourist areas bustling.

Sticky, a lolly store in The Rocks area of Sydney, and a SmartCompany Resilience Awards winner, has pivoted its retail offering to be almost entirely online. But, the team still runs a physical retail store.

“The current lockdown is a massive blow to small retail,” owner David King tells SmartCompany.

“The businesses around us were praying for a decent school holiday trade with locals and interstate tourists,” he says.

Instead, he describes the scenes around the Rocks as “like a zombie movie”, with stores shuttered and streets empty.

Speaking to SmartCompany, ARA chief executive Paul Zahra says any COVID-19 restrictions or lockdowns cause “an immediate hit” to consumer and business confidence.

Even after measures are relaxed, it takes time for that confidence to return, he explains.

So without the safety net of the JobKeeper wage subsidy package, he would like to see the extension of existing voucher schemes, and grants for affected small businesses.

“Without a safety net like JobKeeper and with consumer confidence severely impacted, many small businesses will be pushed to breaking point,” he says.

Unlocking ‘fortress Australia’

The lockdown comes less than a week after New South Wales Treasurer Dominic Perrottet handed down the state budget.

Changes to stamp duty tax added an additional $1 billion to the budget, while a localised approach to COVID-19 lockdowns was hailed by Perrottet as a key contributor to NSW’s relatively uncompromised financial wellbeing.

The budget pledged $1 billion for the health response to the pandemic, including cash for vaccine distribution, protective equipment, vaccine distribution and quarantine facilities.

There was not a lot, however, pledged for a business recovery, particularly for retailers.

The government announced an extension to the Dine & Discover voucher scheme, plus a new $50 million CBD Friday voucher program, and funding for the events sector.

At the time of writing, no support measures have officially been announced for businesses affected by the latest lockdowns, although Premier Gladys Berejiklian has hinted that financial support will be made available soon.

King says he is lucky to not necessarily need this, as Sticky’s online trade now makes up the bulk of its business.

However, the support needed in the broader retail community depends on the timeline, he says.

If the lockdown lasts the scheduled two weeks, then he would like to see rent relief for small retailers.

Longer term, however, it’s all about the vaccine rollout. The virus isn’t going to disappear, he says.

In a statement on the lockdown, Zahra said the vaccine rollout is “critical to ensure we avoid further instances of lockdown”.

And King agrees.

“A reasonable level of herd immunity in the community, loosening the restraints around fortress Australia, and finding a way to live carefully in the open … is the only way forward for retailers that cannot survive online,” he says.

Some eight months since vaccines became available, less than 5% of The Australian population is fully vaccinated,” he notes.

“It’s a complete disaster.”

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