• On a month-on-month, seasonally adjusted basis, growth continued in February (+1.3%), following a return to growth in January.
• In year-on-year terms however, contraction in growth continued in February, albeit easing (-2.9% y/y).
• Monthly growth in February was driven by larger share categories, personal and recreational goods, and grocery and liquor, along with games and toys, homewares and appliances, and fashion. Conversely, department stores, and takeaway, contracted after strong growth in January. In year-on-year terms, media, takeaway food, games and toys, and personal and recreational recorded growth, the first time for the latter category since May 2022. The largest sales category, homewares and appliance, contracted for a ninth month, in year-on-year terms.
• Growth was recorded for all states this month, except TAS and ACT. SA led this growth, with NSW and VIC also stronger. In year-on-year terms, all except NT and WA contracted, with NSW, ACT, and TAS worse than the headline.

• Metro areas generally fared better in the month, with SA leading. The exception to this was regional QLD, which outpaced metro areas. In year-on-year terms, the contraction in metro areas was slightly better relative to regional areas. This was the case in all states except QLD and TAS.
• Growth was on par with the overall for domestic retailers in the month, with international retailers slightly slower. In year-on-year terms, the contraction in growth for domestic retailers continues to reflect base effects of elevated growth the year prior.
• NAB estimates that in the 12 months to February, Australians spent $52.81 billion on online retail, a level that is around 12.8% of the total retail trade estimate (January 2023, Series 8501, Australian Bureau of Statistics), and a contraction (-3.4%) relative to the 12 months to February 2022.

NAB Chief Economist, Alan Oster commented:

NAB Online Retail Sales Index month-on-month growth accelerated in February after returning to growth in January. This was somewhat different to our broader retail sales measure, which indicates that spending was flat in February, with the goods side contracting. Monthly growth returned to NSW this month, and accelerated for VIC, which clearly influenced the overall result, given their weight in the index. In year-on-year terms, a milder contraction was observed in February. Over the next few months, given the base effects of strong prior year growth are beginning to subside, it is conceivable that we will observe a continuation of this trend.

By category this month, the largest sales category, homewares and appliances, recorded growth in the two largest sales states, NSW and VIC, as well as SA. However, in year-on-year terms, the category continues to contract, losing share in the index. Conversely, the share of the index for categories including department stores, takeaway food, games and toys, and media, have increased over the past 12 months. However, recent results in year on year change for takeaway food, and media, appear to be slowing from elevated levels. Given the latest result for these categories, and pressure placed on discretionary categories, we will continue to monitor to see if these trends continue.

Get all the insights in the NAB Online Retail Sales Index (February 2023)