June 10, 2020

NAB Cashless Retail Sales Index: May 2020

The Australian retail sector is facing extreme volatility amid a cycle of panic-buying, shutdown and now staged reopening.

This month we continue our podcast series to accompany the NAB Cashless Retail Sales Index. It’s a short, 10 minute podcast, designed to give you a quick summary of the major drivers of the index this month. Listen now.


  • Our data mapping points to another large swing in May. We forecast that the ABS retail trade measure will rise 5.5% in May, having fallen almost 18% in April.
  • The large swings in the official ABS data in recent months have been hard to match in our data and therefore have seen significant revisions to our mapping equations. Our forecast fall of 5.3% in April (since revised to -14.4%) notably undershot the ABS print of -17.7%. Following the ABS print of an extraordinary 8.5% gain in March, while we initially forecasted 0.2% (revised to 5.3%).
  • What then can we say about retail sales in May? We expect the result to be a strong positive on a month-on-month basis, although coming off a very low base. While the headline result will likely appear encouraging as more businesses reopen, parts of the retail sector will likely experience ongoing challenging conditions this year and into next.

NAB Chief Economist, Alan Oster commented:

The Australian retail sector is facing extreme volatility amid a cycle of panic-buying, shutdown and now staged reopening. All this amid the sharpest and most rapid slowdown in the economy in living memory. Our forecast for May points to a partial rebound, following a record collapse in April as panic buying ended.

Our data shows huge differences between retail sub-sectors in May. Food, department stores and other retail have, on our estimates, rebounded strongly. Household goods looks to have seen the last of the work from home office equipment and furniture surge, while clothing and footwear and cafes, restaurants and takeaways seem to have declined even further. Cafes restaurants and takeaways may see some upside from easing restrictions, but clothing and footwear will continue to struggle if large numbers of office workers remain working from home.

While Australia has been extremely effective in controlling the virus, our latest forecasts point to a lingering economic impact. We see a pickup in H2 2020 and continued recovery in 2021. But despite a rebound in growth, we don’t see the level of GDP fully recovered (i.e. back to Q4 2019 levels) until mid-2022.  This will be a major challenge.

For more information, please see the NAB Cashless Retail Sales Index May 2020.