• On a month-on-month, seasonally adjusted basis, growth contracted in June (-4.1%), reversing the strong growth in May.
• In year-on-year terms, after the contraction in growth over the past year ended in May (revised 4.4%, was 4.9%), growth was virtually flat in June (0.1% y/y).   
• All categories recorded a contraction in growth in the month, with takeaway food particularly weak.  Personal and recreational goods, which had recorded strong growth for the past four months, also recorded a result worse than the overall, along with large sales category, homewares and appliances. The latter category, along with department stores, heavily influenced the year-on-year result, with all other categories recording growth, albeit very moderate for fashion.
• The big sales states led the contraction in sales growth this month. QLD was particularly weak for the takeaway food category, with homewares weakest in VIC, and department stores for NSW. In year-on-year terms, NSW was a clear drag on the overall result, with VIC and QLD closer to neutral.
• Regional areas generally fared better in the month, in so far as the fall was only around half that of metro areas. In year-on-year terms, regional areas recorded growth for a second month, while metro recorded a contraction.
• Both domestic and international retailers recorded a contraction. The former fared worse, though this follows a strong acceleration the month prior. In year-on-year terms, growth for international has outpaced domestic.
• NAB estimates that in the 12 months to June, Australians spent $53.29 billion on online retail, a level that is around 12.7% of the total retail trade estimate (May 2023, Series 8501, Australian Bureau of Statistics), and a contraction (-5.1%) relative to the 12 months to June 2022.

NAB Chief Economist, Alan Oster commented:

We observed a large monthly contraction in June, a reversal of the strong NAB Online Retail Sales Index growth recorded in May. A similar, albeit more mild result (-0.5%) was observed in our broader indicator of retail trade. However, the two have diverged this month in respect to the hospitality (cafes and restaurants) component of retail trade. For the online measure, takeaway food recorded a strong contraction, while the broader measure for the category recorded an acceleration in growth. It is quite plausible that, people choose to dine out (i.e. in-store) in June rather than home delivery. Notable is that online grocery and liquor also fell in the month, albeit at half the rate of takeaway.

The delineation in the change in spend between what might be categorised discretionary or non-discretionary seems to be somewhat blurred in these results. Media (books and visual), and games and toys, were less negative in month-on-month terms relative to other categories. Indeed, in year-on-year terms, the former category has outpaced all others. This suggests that, even in the current climate, not all discretionary items have been impacted.

Get all the insights in the NAB Online Retail Sales Index (June 2023)