Cashless Retail Sales Index: September 2021
Reopening in NSW, soon to be followed by the ACT and Victoria, should give retail spending a good kick along in October and November.
- Our data mapping points to a rebound in retail sales in September. We see the official ABS measure gaining 2.2% on a month-on-month basis. Retail sales fell 1.7% in August – we forecast a 2.7% drop at the time, since revised to -1.7%.
- September results were clearly affected by lockdowns in much of New South Wales, Victoria and the ACT, suppressing retail and more acutely hospitality spending. But our data suggest that consumers have begun to turn a corner, reflected in this print, as well as our weekly consumer spending updates, which have seen an uptick over recent weeks.
- Lockdown ended in Sydney on Monday, to be followed by the ACT on Friday and Melbourne in around two weeks. It remains unclear whether consumers will “snap back” to the same extent as previous reopenings with the virus circulating in the community this time. However, higher than expected vaccination rates (the ACT and NSW are now over 90% first dose, with Victoria on track to reach this milestone in around a week) should give the reopening real durability.
NAB Chief Economist, Alan Oster commented
Retail conditions in lockdown-affected areas have clearly been challenging for many businesses, with hospitality hit particularly hard. However, our data now indicate that lockdown-affected areas are turning a corner. Reopening in NSW, soon to be followed by the ACT and Victoria, should give retail spending a good kick along in October and November.
While this report, alongside our weekly tracking data, provides some encouraging news, the NAB Monthly Business Survey provided a more nuanced picture for businesses in September. While confidence in NSW and Victoria rebounded ahead of reopening, actual business conditions fell significantly during the period. We expect that reopening will bring an uptick, but how quickly conditions recover will depend on consumer sentiment in the face of ongoing cases.
For more information, please see the NAB Cashless Retail Sales Index (September 2021)