September 20, 2017

NAB Monthly Cashless Retail Sales Index: August 2017

NAB’s proprietary indicator of Australian retail sales, the NAB Cashless Retail Sales Index, reveals a sharp decline in spending in the month of August.


  • The value of cashless retail spending increased at a yearly rate of 5.3% in August, down from 7.7% in July (in seasonally adjusted terms). While yearly growth rates have consistently slowed from a peak of over 12% in late 2015, this month’s decline is particularly pronounced.
  • The slowdown in spending was relatively broad-based, with yearly growth down across nearly all categories. Spending growth for clothing & footwear (1.2% yoy), department stores (1.5% yoy) and cafes, restaurants &takeaways (2.1% yoy) is particularly anaemic. Spending on food (4.9% yoy) and household goods (3.4% yoy) is a little healthier, while spending on “other retailing” is growing rapidly (8.5% yoy ) despite some slowing.
  • The slowing was also evident across all states and territories, although remained strongest in the ACT (7.2%yoy), NSW (6.1%) and Victoria (5.2%), followed by Qld (4.7%) and SA (4.5%). WA retains the weakest growth in cashless retail (1.3%) (Chart 4).
  • The decline in the NAB Cashless Retail Sales Index in August follows slower (but positive) growth in June and July after faster growth in April and May. Based on movements in the NAB cashless spending index and our data mapping techniques, ABS retail trade is expected to decline by 0.5% mom in August which would be the weakest monthly growth rate since March 2013. (See table below and appendix.)
  • The NAB Cashless Retail Index is broader than the NAB Online Retail Index and measures all cashless retail spending by consumers using debit and credit cards (both in person and online), BPAY and Paypal. The index is derived from personal transaction data from NAB platforms (around 2 million transactions per day)and offers a 2-3 week lead on ABS retail trade data. Cashless sales to consumers have been growing much more rapidly than the ABS measure of retail sales in recent years (7.7% yoy in July versus 3.6% yoy in July), although the gap in growth rates has narrowed (Chart 1). Further convergence is likely as the penetration of online and contactless payment systems reach a limit (reflecting minimum spend requirements for cashless transactions and the existence of a proportion of merchants who deal only in cash).

For more information, please refer to the attached report