NAB Online Retail Sales Index: October 2016

Fundamentally the trend slowing in online retail growth continued in October

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Online sales slow in October

  •  The NAB Online Retail Sales Index increased 0.5% (mom, s.a.) in October, much slower than the previous month(1.4%,mom, s.a.). Year on year growth also slowed from 14.6% to 13.5%. The revised trend estimate for online retail sales continues to slow, currently at 0.5%, down from 0.7% last month.
  • ABS data on traditional retailers showed month on month seasonally adjusted was grew 0.6% in September, with year on year growth of 4.2%.
  • We estimate that Australian consumers have spent around $21.08 billion over the last 12 months to October 2016. This is equivalent to 7.0% of spending at traditional bricks & mortar retailers as measured by the ABS in the 12 months to September 2016.
  • The October headline result was due to slowing in some larger spend share categories including Homeware and Appliances (14.4% yoy Oct vs 18.6% yoy Sep), Media (24.1% yoy vs 28.3% yoy), and Groceries and Liquor (4.4% yoy vs 5.4% yoy). Fashion was the exception in the larger share sectors in that it strengthened (13.5% yoy vs 10.6% yoy).
  • With the exception of Personal and Recreational Goods (18.9% vs 12.2%) and Food Catering (35.9% yoy vs 42.8% yoy), growth accelerated in most smaller spend share categories including Games and Toys (11.6% yoy vs -2.8% yoy), Department and Variety Stores (4.0% yoy vs 2.1% yoy), and Daily Deals (2.4% yoy vs -11.1% yoy).
  • SME sales represents just over a third of all online sales. SME sales slightly outpaced broader sales in October, with seasonally adjusted monthly growth estimated at 0.6%. Year on year growth for SMEs (20.7%) was considerably stronger than Corporates (13.5%).

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