Below trend growth to continue
NAB Online Retail Sales Index accelerated in June, following the May rebound.
NAB Chief Economist, Alan Oster commented:
In month-on-month terms, our NAB Online Retail Sales Index accelerated in June, following the May rebound. Growth also accelerated when comparing this June to 2020, i.e. in year-on-year terms. This indicates considerable strength in the index, given that the base of June 2020, had already grown 53% on June 2019. Year-on-year growth had been trending lower earlier in the year, but has picked up recently, and in June, there was a strong contribution from key online sectors to the headline result.
Growth in monthly sales in June was driven by VIC, which has grown strongly over the past two months after contracting in April. Given the patterns observed over the past year, it is likely that this result has been strongly influenced by the lockdown period. Having said that, online sales growth accelerated in states and territories with and without lockdown in the month. ACT for example, without lockdown, was second fastest in the month, so it is likely that part of this growth is related to other drivers, like sales events. As noted last month, growth for takeaway food seems to contract in the early part of a lockdown, and then recovers. This pattern has again held true for the states that entered some form of lockdown in the month, albeit with limited timeseries, it is more an observation than statistically robust relationship. In year-on-year terms, larger sales categories like personal and recreational goods, and homewares and appliances, returned to growth, and department stores outpaced takeaway food. In June, department stores growth was faster than the same period 2020, a time when a previous VIC lockdown was beginning, with rapid online sales.
In month-on-month terms, growth accelerated for both metro and regional areas, with growth faster for the former. This was driven by metro VIC, NSW, and QLD. In year-on-year terms, metro growth is stronger across most states except TAS, where online sales from regional areas was slightly faster.
In month-on-month growth terms, domestic merchants recorded strong growth across most categories but particularly in homewares and appliances, department stores and grocery and liquor. Games and toys, and takeaway food were the only key categories where international recorded growth above domestic in month on month terms. In year on year terms, the key international category of games and toys was faster for domestic retailers.
For further details, please see the NAB Online Retail Sales Index June 2021
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