• On a month-on-month, seasonally adjusted basis, growth contracted in May (-1.6%), following a slightly revised April (1.1%, was 1.3%).
• Growth slowed in year-on-year terms (9.0% y/y), influenced by the easing in base effects of key categories, combined with the monthly result.
• A contraction in growth across all categories in May, with the exception of takeaway food, which rebounded after its April result. The monthly reversal in growth was led by smaller sales category, media, along with fashion, and personal and recreational goods. Average growth for the latter category has been much weaker relative to other categories since the start of the year, so its contribution to 12-months-to index growth has declined.
• A contraction in growth for most states this month, except WA and TAS. Of the larger sales states, the biggest drop was recorded in VIC. While takeaway food growth was the most rapid in VIC, this was clearly not enough, given relative weights, to offset a monthly contraction in all other categories for that state.
• Metro regions have again performed better, with a smaller contraction in the month and stronger growth over the year. One exception to this is WA, where both monthly and year-on-year growth has been stronger in regional areas.
• Both Domestic and International retailers recorded a contraction in growth in the month, with the latter performing slightly better. The contraction in the categories that moved most in the overall (media, fashion, personal and recreational), was from domestic retailers, whereas personal and rec goods for international retailers recorded growth.
• NAB estimates that in the 12 months to May, Australians spent $57.19 billion on online retail, a level that is around 13.4% of the total retail trade estimate (April 2024, Series 8501, Australian Bureau of Statistics), with the acceleration in growth (7.6%) beginning to level off.

NAB Chief Economist, Alan Oster commented:

In month on month, seasonally adjusted terms, online retail sales growth contracted in May, but this follows strong growth in April. While trend growth is generally slowing, this should be put in perspective. Monthly online sales growth has outpaced broader retail growth in all except three of the past twelve months to April. Therefore, although the combined effect of the latest monthly result, along with base effects from a strong rebound in growth in May 2023, slowed the year-on-year growth rate, it is still more rapid relative to the same metric for broader retail.

Also worth noting this month is the source of growth over the past twelve months. While the department stores category recorded a contraction this month, this was milder than most other categories and the overall index. This category has also recorded the highest average monthly growth over the past year, and year-on-year growth far outpaces other categories. As a consequence, given its share of the index, this categories’ contribution to growth in online sales over the past 12 months is well above its weight in the index. The same cannot be said of games and toys, and homewares and appliances.

Get all the insights in the NAB Online Retail Sales Index (May 2024)