Australia’s economic recovery has stagnated following the wide scale lockdowns in greater Melbourne, border closures and spikes in COVID-19 cases across the country in July, according to the latest data from Zip’s Weekly Spending Index.

While June signaled economic recovery and optimism, the economic picture in July was one of increasing pessimism. Zip’s data has shown that many segments that saw recovery in June such as cafes, pubs and bars, restaurants and gyms, have seen their recovery stunted throughout July.

A key trend that has been accelerated by COVID-19 which continued in July is the move away from physical cash and towards ecommerce with ATM withdrawals down 17% and online marketplace purchases increasing 90%.

Zip co-founder and chief operating officer, Peter Gray said the recent spike in COVID-19 appears to have flattened the curve of Australia’s economic recovery.

“Instead of building on the nation’s retail growth in June, we instead are looking at a far bleaker picture that may spell the end for many bricks and mortar businesses. A second lockdown period was the last thing many businesses could have afforded.

“July was an incredibly tough month for many industries, and we saw some gains made in June either paused, or wiped out completely. More concerning was the fact that many Australians were turning to debt consolidators, and mental health services to support them during their plight.

“While these are incredibly trying times, we’re also seeing the resilient best of Australians, playing with the hand that they have been dealt. Every day I see new businesses that would typically have been bricks and mortar move online to build new revenue streams, in the hope of surviving these tough periods.

“What these businesses are doing well – and all businesses should look to do – is moving with consumer trends. As more money moves online, ensure your business is there to capitalise on it.”

The Zip Weekly Spending Index is based on anonymised transaction data from a sample of more than 1.5 million Zip customers and 300,000 Pocketbook users.

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