Growth, inflation and labour market all easing
NAB's Online Retail Sales Index returned to growth in January.
NAB Chief Economist, Alan Oster commented:
In month-on-month terms, our NAB Online Retail Sales Index returned to growth in January, and the contraction observed in November and December has been revised up. January is typically a more subdued month for online retail, but this year, with the spike in Omicron cases, more people chose the click option. The jump in January also altered the seasonal estimates for surrounding months, with November and December now revised upwards.
It would appear a preference to avoid close contact and in-store restrictions emerged over this period, with people continuing to restrict in-person social contact, despite a general easing of regulated restrictions in most states. There are also other constraints that may have helped online retailers in recent months. With consumers facing uncertainty about instore supply of goods, the ability to check and confirm orders online may have also factored into current online activity.
For the category that led growth in the month, department stores, the result was consistent across regions, except NT and SA, where it ranked second behind games and toys, and homewares and appliances respectively. In January, there was also strong growth in food related spending, relative to a year prior, with both grocery and liquor, and takeaway food growing strongly. This supports the above notion, that consumers were increasingly opting for reduced direct social contact during the Omicron wave, even for categories considered staples. Our broader consumer monitor, which includes in-store and at-venue purchase, suggests that spending in hospitality had begun to recover over the past couple of weeks. If this continues, we may see a tempering of these rapid growth rates, as the Omicron induced boost to online sales ease.
This month in the heat map section, we take a look at Fashion, and the change in growth compared to the pre-pandemic period.
Get all the insights in the NAB Online Retail Sales Index (January 2022)
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