February 28, 2024

NAB Online Retail Sales Index: January 2024

Growth rebounded in January from a significant drop in December

  • On a month-on-month, seasonally adjusted basis, growth rebounded rapidly in January (11.1%), following a revised December (-3.3%, was -3.9%).
  • Growth also accelerated in year-on-year terms in January (27.8% y/y), a rate not seen since the depths of the pandemic period. However, this result is more reflective of the subdued period for online retail in 2023.
  • Broad-based growth by category in January, with a particularly strong rebound for grocery and liquor. Takeaway food, department stores, and media also grew at a rate above the broader index, while the largest sales category, homewares and appliances, was almost on par. A relatively smaller bounce for the fashion category.
  • Growth recorded for all states this month, with the smaller states ex Tas generally above the rate of the broader index. We observed in December that NSW and VIC contracted by a smaller rate relative to other states, and now in January, the rebound was not as rapid, with growth slightly slower than the overall.
  • Growth observed for metro and regional areas this month, with both rebounding rapidly. The strength for metro areas was particularly noticeable in NSW, which grew faster than the overall index, while regional growth was led by WA and SA. In year-on-year terms, metro areas continue to lead regional, with a noticeable gap between the two for WA and NSW.
  • Both domestic and international retailers recorded growth in the month, with the former performing slightly above the overall, and the latter slightly below. In year-on-year terms, growth for domestic outpaced international, albeit this is to a reference month in 2023 where domestic growth contracted.
  • NAB estimates that in the 12 months to January, Australians spent $55.8 billion on online retail, a level that is around 13.1% of the total retail trade estimate (December 2023, Series 8501, Australian Bureau of Statistics), and a continuation of moderate growth (5.0%) relative to the 12 months to January 2023.

NAB Chief Economist, Alan Oster commented:

In month on month, seasonally adjusted terms, growth rebounded in January from a significant drop in December. The strong growth is partially down to seasonality. January was the first time in the series history where that month’s growth in original (n.s.a) terms was positive. Conversely, the monthly growth contraction in original terms for December was the worst for that month’s series history. Hence, mild growth in January was boosted significantly by the seasonal estimates. In year-on-year terms, growth is clearly reflecting base effects of the drop in early 2023, which should moderate, all else being equal, in coming months. With growth in both the year-on-year and 12-months-to metrics beyond the broader retail trade series, the share of online sales as a proportion of broader sales increased again this month.

By category this month, the rebound was fairly broad based, albeit more so for grocery and liquor and less so for fashion. Growth was particularly strong for the former in SA, WA, and the ACT, with NSW and VIC closer to the average for the category. WA also recorded particularly strong growth for the largest sales category, homewares and appliances.

Get all the insights in the NAB Online Retail Sales Index (January 2024)

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