Growth, inflation and labour market all easing
In month-on-month terms, our NAB Online Retail Sales Index contracted for a second consecutive month in March.
NAB Chief Economist, Alan Oster commented:
In month-on-month terms, our NAB Online Retail Sales Index contracted for a second consecutive month in March. Growth over the past two years has been particularly volatile, with the standard deviation more than double when compared to the first eight years of the series. Looking through this monthly volatility, using the year-on-year and 12-months-to measures, online sales continue to grow.
Our broader measure of retail trade, the nab cashless retail index, suggests retail was up moderately in March after strong growth in January and February. So, it is likely that, with the easing of instore restrictions in most states in February, instore sales were again boosted in March, while online contracted. This result is consistent with what has been observed in the UK (BRC) and the US (Census Bureau).
For online retail, we think that it’s of interest to note that dollars spent over the past couple of months has fallen faster, in mom terms, than volumes. If this continues, it may reverse a trend observed since early 2020, where average spend per transaction had generally been rising. What this also suggests is that some online retailers may have been discounting to actively manage post-Christmas stock. This is not consistent with what has been observed in the UK and US, where prices were driving much of the increase. Fashion, the category which grew in mom terms in March resisted the broader local trend, with volumes lower, indicating the possibility of price rises driving sales growth.
This month in the heat map section, we take a look at department stores, and the change in growth compared to the pre-pandemic period.
Get all the insights in the NAB Online Retail Sales Index (March 2022)
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