Below trend growth to continue
The NAB Online Retail Sales Index grew in May, after a contraction in April.
NAB Chief Economist, Alan Oster commented:
In month-on-month terms, our NAB Online Retail Sales Index grew in May, after a contraction in April. When comparing this May to 2020, i.e. in year-on-year terms, growth, while slower than much of the past year, accelerated in May. While year-on-year growth is still trending lower given base effects from 2020 (May 2020 was +52.4%(y/y)), growth this month partly stemmed this slowing.
Growth in monthly sales in May was driven by VIC. While VIC’s growth is partly a rebound from last months contraction, it is likely that, albeit only a few days are included in the data, lockdown, and concerns pre-lockdown, contributed. VIC led sales growth in department stores, and was strong in other key segments like grocery and liquor, and games and toys. Interestingly, for a state entering lockdown, growth for takeaway food contracted along with most other states. We will have to wait until we have June data, but broadly what we observed in the early stages of the pandemic in 2020 was a reluctance for takeaway food in early periods, with a preference for grocery and liquor during periods of shutdown. In year-on-year terms, the personal and recreational goods, and homewares and appliances categories continued to contract. However, base effects are playing a part here, as this is a comparison to a period where the category recorded strong growth.
In month-on-month terms, growth retuned for both metro and regional areas, with growth slightly faster for the former. Metro VIC clearly jumped, while growth in NSW appears primarily from regional areas. In year-on-year terms however, metro growth is stronger across most states.
In month-on-month growth terms, domestic merchants recorded growth, particularly in categories like homewares and appliances, while sales at international merchants contracted. Games and Toys, and Media were the only key categories where international recorded growth above domestic. Takeaway food was also higher for international, though this is a small share of category spend.
For further details, please see the NAB Online Retail Sales Index May 2021
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