Below trend growth to continue
Growth in the NAB Online Retail Sales Index slowed a little from the record set in July.
NAB Chief Economist, Alan Oster commented:
Our NAB Online Retail Sales Index continued to grow in August, again supported by the exceptionally strong monthly growth in Victoria. This data incorporates a full month of stage 4 restrictions in metropolitan Melbourne. Below, in the heatmap section, we take a look at the change in the department store category for Victoria, which was a key driver of growth in that state this month.
Department stores led growth in the month, with exceptionally high growth in Victoria and strong growth in ACT, SA and NSW. Grocery and liquor has now recorded 14 months of continuous growth, although the state results for this category are far more mixed. Vic, NSW and SA contributed to growth in the third fastest category, personal and recreational goods, with all other states contracting. Growth for the largest sales category, homewares and appliances, was flat in the month, with only Vic and NT recording growth. At the other end of the scale, media contracted in all states and territories in the month. In year-on-year terms, however, this category is currently the 4th fastest and has contributed strongly to the headline.
The three most populous states represent just over 80% of all online sales, slightly above their share of the population. Of these three states, Victoria recorded the strongest growth in the month, well above growth in the other states. The lock-down is clearly impacting the result as businesses adapt, with contactless pickup and discounted or free delivery. In year-on-year terms, online sales in Victoria are more than double what they were in the same month 2019. This is well beyond any Christmas period trading that we have observed for Vic online retail in both growth and absolute dollar terms. The state also led growth in each category, except media, and takeaway food in the month.
Despite slowing, metro areas continued to grow, while regional areas contracted in the month. The regional result was saved from further weakness by Victoria, with all other key regional areas contracting in the month. In year-on-year terms, Victoria leads in both metro and regional sales growth, with metro (+126%) more than double what it was in August 2019, and regional also up strongly (+73.8%). Although NSW recorded growth in the month, this was all due to Metro areas, with regional areas contracting.
In terms of merchant location, sales for domestic merchants slowed from strong growth in the month prior, while sales growth for international continued to rebound from the contraction in June. In year-on-year terms, domestic merchants have significantly outpaced international.
For further details, please see the NAB Online Retail Sales Index August 2020.
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