Growth was flat for the NAB Online Retail Sales Index in February (0.1%), from revised growth in January (3.9%), on a month-on-month, seasonally adjusted basis.

• In year-on-year terms, the growth in the NAB Online Retail Sales Index slowed (40.7% y/y). While slower than the record-breaking period between April and November 2020, it remains elevated. In the coming months, we are likely to see the base effects from the high sales growth period of 2020 begin to affect the year-on-year comparisons.

• Mixed results this month, with four of eight categories recording sales growth. Strongest growth was recorded by smaller sales category games and toys, and mid-size categories, department stores, fashion, and personal and recreational goods. But this growth was netted by a contraction in the two largest categories, homewares and appliances, and grocery and liquor, along with media, and takeaway food. For more detail, see Charts 3, 5, 7 & 8 and table 3 below.
• In month-on-month terms, growth was recorded in WA, VIC, SA and TAS. The February sales contraction in NSW and ACT follows on from their strong growth in January. Note that February was the period of short ‘Circuit breaker’ lockdowns for VIC and WA. In year-on-year terms, VIC still leads, along with other large sales state NSW, and WA. See charts 4,6,9-14, and table 3 for more detail.
• Regional areas which had rebounded more strongly in January, did not slow as much as metro areas in February. The headline contraction for NSW and QLD was more pronounced in metro areas. In year on year terms, metro VIC continues to outpace all other areas. Growth in regional WA, NSW and TAS was stronger relative to metro areas in those states. See Charts 15 and 16 for more detail.
• Sales growth was recorded for international merchants in month-on-month terms, with domestic online retailers contracting slightly in the month. Sales growth for domestic merchants was slower in all categories, except media, and personal and recreational goods, in the month. See charts 13 and 14, and table 4 for category growth and share.
• We estimate that in the 12 months to February, Australians spent $46.9 billion on online retail, a level that is around 13.2% of the total retail trade estimate (Preliminary February 2021, Series 8501, Australian Bureau of Statistics), and about 48.4% higher than the 12 months to February 2020.

NAB Chief Economist, Alan Oster commented:

In month-on-month terms, our NAB Online Retail Sales Index was flat in February, after strong growth in January which outpaced overall retail trade growth. When comparing this February to 2020, i.e. in year-on-year terms, the index continues to grow strongly, just under the pace set between April and November (50% to 60%). It is worth noting however, that in coming months, the year-on-year growth metric will be impacted by the base effects of the initial online spike of March and April 2020. An element of caution and perspective is advised when interpreting the year-on year results over the next few months.

We continue to observe shifts in the relative category share in the index. Games and Toys now represents about 8.9% of the total, adding over a full percentage point in the past year. In 2012, this category was about 5% of the index. For media, its share in the index is now smaller, not helped this month by a large contraction.

All states recorded growth in fashion, and games and toys, but state results were mixed for all other categories. Most states saw a contraction in spend on grocery and liquor, but notably, the circuit breaker states, VIC and WA, recorded growth, along with NT. For NSW and ACT, falls were recorded in most other sectors, particularly large sales categories, homewares and appliance, grocery and liquor, and personal and recreational, which contributed heavily to their monthly result.

As expected, strong online retail sales growth was recorded in the states with the short ‘circuit breaker’ lockdowns (VIC and WA). This is in stark contrast to total retail trade preliminary February numbers from the ABS, where the instore component for these states is likely to have resulted in a sales growth contraction. For online, the sales growth in these states was netted by a contraction in some other states, particularly NSW and QLD. By region in February, it was metro NSW and QLD which clearly impacted the overall metro result, outweighing strong growth in VIC and TAS. For regional areas, WA has recorded two very strong months of growth, following on from a contraction in December. Over the year though, metro areas are still outpacing regional, led by VIC.

For further details, please see the NAB Online Retail Sales Index February 2021