Deloitte and peak retail body warn of COVID-related supply constraints ahead of Christmas sales period

A new report from Deloitte Access Economics warns traders will struggle to replenish depleted inventories as a result of disrupted supply chains from the coronavirus pandemic.

The fresh analysis from the global auditing giant coincides with the nation's peak retailing body predicting sales from the inbound Black Friday and Cyber Monday weekend will inject upwards of $5.4 billion in additional spending.

Deloitte retail expert David White said higher level of freight costs and labour shortages would impact retailers into the crucial trading season.

"Global supply chains have come under pressure as the world's consumers emerge from the pandemic, and Australia is not immune from the fallout," Mr White said.

Mr White noted the recent reopening of international borders and the end of lockdowns would overall provide a positive boost to the sector.

"There is cautious optimism on this front, but still concerns about sufficient stock being available for peak Christmas trading. And while consumer demand is expected to be strong, higher freight costs and the ongoing requirements to ensure COVID-safe retail environments means there will be ongoing pressures on margins."

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The retail analysis from Deloitte also flagged CBD retail would be impacted for at least the next two years, while flexible working arrangements exist for office workers.

Spending is anticipated to shift to suburban centres while less people are making their way into cities.

Australian Retailers Association has also warned of supply constraints ahead of Black Friday and Christmas, which would likely impact the choice for consumers.

ARA chief executive, Paul Zahra said incoming November sales will inject more than $5 billion to the sector, but warned a "perfect storm" of trading issues and dent inventory levels.

"With our supply chains under significant pressure, consumers need to be shopping early if they want their products to arrive in time for Christmas," Mr Zahra said.

"There are several issues that retailers are navigating at the moment - everything from COVID impacts, shipping delays and threats of industrial action from port workers and delivery drivers."

Despite short-term supply constraints, Deloitte's report shows 80 per cent of surveyed retailers expected sales to grow over the coming 12 months, and more than half believed a spending sugar hit would occur following the end of lockdowns.

"The reopening of Australia both internally and internationally will be good for consumers and the economy," Mr White said.

"We will have more cash to spend, but we will also have more options for our discretionary spend, and some retailers may face headwinds as we refocus our attention to other activities and opportunities across the likes of travel and entertainment."

Latest retail trade figures from the Australian Bureau of Statistics shows turnover rose 1.3 per cent compared to the prior month.

In the ACT, September sales plummeted 29.5 per cent compared to the bush capital's turnover record, which was only set two months before.

Mr Zahra from the ARA noted the inbound Black Friday and Christmas trading season was crucial for retailers, as up to two-thirds of profit is made during the period.