Growth, inflation and labour market all easing
NAB Online Retail Sales Index contracted again in April, after a revised contraction in March.
NAB Chief Economist, Alan Oster commented:
In month-on-month terms, our NAB Online Retail Sales Index contracted again in April, after a revised contraction in March. When comparing this April to 2020, i.e. in year-on-year terms, growth has now slowed considerably. As mentioned last month, part of this slowdown in year-on-year growth is a result of the base effects of the initial online spike in 2020. At that time, online growth accelerated to +60.9%(y/y), with double digit growth only ceasing now. An element of perspective is advised when interpreting the year-on year results over the next few months.
The contraction in sales this month was driven by another drop in the largest sales category, homewares and appliances in all states except WA and ACT. There was also a drop for other key sales categories, fashion, and personal and recreational goods, which weighed heavily on the overall result. In year-on-year terms, the personal and recreational goods category contracted heavily. However, base effects are playing a part here, as this is a comparison to a period where the category recorded strong growth. There was general alignment between most overall category results and state category result this month, with some minor exceptions such as growth for WA grocery and liquor, or the contraction in media spend for VIC and NT.
In year-on-year terms, growth for metro and regional areas has somewhat converged, but, split by state, there remain some large differences. Most of the contraction in NSW appears primarily from regional areas, which also detracted from growth in VIC. However, for QLD, it was regional areas that outpaced metro.
In month-on-month growth terms, while both domestic and international sales contracted, this months result was more heavily weighted towards domestic retailers. Categories like homewares and appliances, that are predominantly domestic, contracted for both, as did fashion, which has a larger international presence. The game and toy, and personal and recreational goods, categories looked to be similarly affected, regardless of merchant location in April. Over the past year, growth had been driven overwhelmingly by domestic online retailers, but international retailers, which did not grow as strongly in 2020, are beginning to outpace domestic.
For further details, please see the NAB Online Retail Sales Index April 2021
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