Growth continued, albeit at a slower pace, for the NAB Online Retail Sales Index in July (6.4%), following an upwardly revised June (8.4%, previously 7.6%), on a month-on-month, seasonally adjusted basis.

In year-on-year terms, the growth in the NAB Online Retail Sales Index accelerated in July (20.1% y/y). Year-on-year growth had previously begun to moderate, given the base effects from high growth for the same period 2020.

Growth was recorded in month-on-month terms for all categories, led by grocery and liquor, which accelerated and grew at almost twice the rate of the overall index. The largest sales category, homewares and appliances, which had returned to growth in May, continued to grow in July, albeit at a rate slightly slower than the broader index. In year-on-year terms, department stores continue to lead. For more detail, see Charts 3, 5, 7 & 8 and table 3 below.

In month-on-month terms, online sales growth accelerated in all states and territories, except VIC, which contracted slightly after rapid growth in June. Growth was led by NSW, at a rate double that of second placed NT. By category, NSW ranked first this month for all categories, except homewares and appliances, games, and takeaway food, where it ranked second. It noteworthy that, even for goods considered essential, and physical store front still open under current lockdown restrictions, the fastest online category in NSW was grocery and liquor. See charts 4, 6, 9-14, and table 3 for more detail.

Monthly growth in online sales was higher in metro areas relative to regional, driven by NSW. All other metro areas recorded growth, except VIC, which contracted after rapid growth in June. For NSW, growth in metro areas was nearly about five times that of regional areas in July, and in year-on-year terms, nearly triple. VIC was the only state in July where growth was much faster in regional areas in year-on-year terms. See Charts 15 and 16 for more detail.

Sales growth was recorded for both domestic and international merchants this month. Sales growth for international merchants was slower than domestic in all categories, except department stores, media, and personal and recreational goods, this month. See charts 13 and 14, and table 4 for category growth and share.

NAB estimates that in the 12 months to June, Australians spent $49.7 billion on online retail, a level that is around 13.6% of the total retail trade estimate (June 2021, Series 8501, Australian Bureau of Statistics), and about 32.8% higher than the 12 months to July 2020.

NAB Chief Economist, Alan Oster commented:

In month-on-month terms, our NAB Online Retail Sales Index continued to grow in July, albeit at a rate slower than June. Growth accelerated when comparing this July to the same month 2020, i.e. in year-on-year terms. This indicates considerable strength in the index, given that the base of July 2020, had already grown over 63% on July 2019. Growth had trended lower in April and May this year, but has picked up again in the past three months, with a strong contribution from key online sectors.

Growth in monthly sales in July was driven by NSW, whereas VIC, which led growth in June, contracted slightly, and other states slowed. Growth was strong across all categories in NSW, but particularly strong online sales growth was observed in grocery and liquor, personal and recreational goods, and department stores, relative to other states and territories. In year-on-year terms, the growth in department stores has been so rapid that the spend share has boosted its place to second largest in the index, behind homewares and appliances, and just ahead of grocery and liquor, which has also grown rapidly.

Metro NSW had a marked contribution to overall growth this month, with an increase of nearly 28% on June, and up nearly 60% on last July. The latter can be seen in our heatmaps section, which shows key geographical areas for NSW growth this month. In month-on-month terms, with the exception of VIC, all states recorded more rapid growth for metro areas. In VIC, metro contracted after rapid growth in June, while metro and regional were on par in SA.

In month-on-month growth terms, there were mixed results by location and merchant category. Overall, domestic merchants recorded strong growth across most categories, but were outpaced this month in the department store, media, and personal and recreational goods categories by international merchants. However, in year-on-year terms, the key international categories, games and toys, and fashion, grew faster for domestic retailers.

Get all the insights in the NAB Online Retail Sales Index July 2021.