• The NAB Online Retail Sales Index returned to growth in June, albeit mildly (0.2%), on a month-on-month, seasonally adjusted basis. The results this month are considerably mixed based on category and state results, somewhat reflecting the varied restrictions around Australia.
• In year-on-year terms, the growth in the NAB Online Retail Sales Index (+49.6% y/y) is on par with the previous month. The year-on-year result implies that, even after the easing of restrictions, online sales growth remains elevated.
• Four of eight categories recorded a sales growth in month-on-month growth terms. Growth was led by large sales category, grocery and liquor, along with media, homewares and appliances, and personal and recreational goods. Grocery and Liquor has recorded growth in each month over the past year. The biggest drop was recorded in the smallest sales category, takeaway food, although this was second fastest in year-on-year growth terms. Given their share of the index, the contraction in fashion, and department stores, had a considerable impact in offsetting the monthly growth result. For more detail, see Charts 3, 5, 7 & 8 below.
• In month-on-month terms, NT, WA and Qld. recorded strong online sales growth, with milder growth in Vic. The largest contraction in sales growth was in ACT, along with SA and Tas., and a milder contraction in NSW. In year-on-year terms, all states recorded double digit growth, with Vic. leading overall, along with smaller sales state, Tas. See charts4,6,9-14, and table 3 for more detail.
• Sales growth in both regional and metro areas recorded growth in June, with the latter returning to growth from a contraction in May, while regional growth has slowed slightly. In year-on-year terms, Metro Victoria recorded the highest growth, along with regional NSW which outpaced metro areas. See Charts 15 and 16 for more detail.
• Monthly growth was driven by domestic online retailers, with sales at international merchants contracting again. In June, category weakness and strength for both domestic and international retailers was in line with the headline result. See charts 13 and 14, and table 4 for category growth and share.
• We estimate that in the 12 months to June, Australians spent $35.69 billion on online retail, a level that is around 10.7% of the total retail trade estimate (Preliminary June 2020, Series 8501, Australian Bureau of Statistics), and about 23.1% higher than the 12 months to June 2019.

NAB Chief Economist, Alan Oster commented:

Our NAB Online Retail Sales Index data returned to more moderate growth in June, from the contraction in May and record growth in the two months prior. While online retail sales growth is typically volatile month to month, the recent changes that COVID-19 has brought to the broader economy, and day to day life, has made it even more so.

While the smaller spend share category, games and toys, contracted in month-on-month terms, this category has performed strongly relative to the same period 2019. This category includes merchants such as online game subscriptions, which have proved popular in the current environment, in addition to physical goods such as puzzles. In month-on-month terms, growth was strongest for the second largest sales category, grocery and liquor. Given that this category has recorded consecutive monthly growth over the past 12 months, it has contributed heavily to the headline result for the year. The category with the third fastest growth in April, fashion, is now back amongst the weaker performers after two monthly contractions, and is slowest in year-on-year terms (+24.6%, yoy).

The three most populous states represent just over 80% of all online sales, slightly above their share of the population. Of these three states, Queensland recorded the strongest growth in the month, but was outpaced by WA and NT. Victoria retains the lead over the year. This month we have included data by state and category to provide additional insights. The strong result for Queensland in the month was driven by grocery and liquor, and homeware and appliance sales, with WA growth more broadly spread across categories. NT was the only region to record growth in fashion in the month, and saw strong growth in personal and recreational gear.

Both metro and regional areas grew in the month. In year-on-year terms, Vic metro leads overall, while regional growth is led by NSW, followed by Vic and Tas.

In terms of merchant location, sales at international merchants saw slight contraction in the month while domestic merchants returned to mild growth. Domestic merchants have significantly outpaced international over the year.

For further details, please see the NAB Online Retail Sales Index June 2020.