Growth, inflation and labour market all easing
In month-on-month terms, our NAB Online Retail Sales Index contracted again in June.
NAB Chief Economist, Alan Oster commented:
In month-on-month terms, our NAB Online Retail Sales Index contracted again in June. Apart from the Omicron induced spike in January, the monthly change has generally been negative since October. This coincided with the ending of lockdowns in the larger states, supporting the broader rebound in instore retail sales. In year-on-year terms, our series recorded a slight contraction. This still compares favourably with some published overseas series. The UK measure (BRC), for example, indicates non-food UK online retail sales contracted 9% in year-on-year terms. In addition, our measure, in 12-months-to terms, remains positive based on the summation of Delta induced elevated activity between July and October 2021, and the Omicron variant of January 2022.
In our broader weekly spending measure, we observed an EOFY boost in the final week of June. However, when rolling up to the month, our Cashless retail indicator suggests that this last week of activity was not enough to outweigh the softer activity earlier in the month. It is likely that inflationary pressures and concerns over the future direction of borrowing costs are beginning to weigh on the consumer.
For online retail, looking beyond the monthly volatility, what we observed in the past twelve months is the strong contribution to the index made by department stores, grocery and liquor, and takeaway food. These three categories make up about 40% of the index, but have contributed about 60% of the growth over the past year. In contrast, largest sales share category, homewares and appliances, has contributed much less to growth than its proportion of the index, while other categories like fashion have been on par.
This month in the heat map section, we zoom in on the latest year-on-year results in Victoria for department stores, and grocery and liquor, to help visualise the result from the metro and regional areas.
Get all the insights in the NAB Online Retail Sales Index (June 2022)
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