• The NAB Online Retail Sales Index rapid growth accelerated again in April (16.2%), on a month-on-month, seasonally adjusted basis. This is the highest ever recorded monthly growth rate in the series history (2012).
• In year-on-year terms, the growth in the NAB Online Retail Sales Index accelerated (+58.5% y/y s.a.) in April, the highest year-on-year growth rate comparison in the series history.
• All eight categories recorded sales growth in month-on-month growth terms. Takeaway food, and games and toys grew most rapidly, with takeaway rebounding from a contraction in March. Of the larger spend share categories, fashion led sales growth, also rebounding in April from negative sales growth in March. The other big driver of this month’s result was the largest sales category, homewares and appliances, growing at a pace slightly faster than the broader index.  For more detail, see Charts 3, 5, 7 & 8 below.
• In month-on-month terms, all states and territories recorded online sales growth. Tas. recorded the strongest growth rate in online retail sales in April, with Vic. and NSW leading the major sales states. In year-on-year terms, all states recorded double digit growth, with Vic. leading.
• Sales growth in regional areas was slightly stronger relative to metro areas in month-on-month terms. Regional growth was driven by the two largest sales states, Vic. and NSW.  See Charts 15 and 16 for more detail.
• Growth in the month was driven by domestic online retailers. Sales at international merchants returned to growth, but at a far slower pace relative to domestic. The largest sales share for international merchants, fashion, was far outpaced by their domestic based counterparts. By category, large spend shares homewares and appliances, and department stores, performed strongly for domestic retailers.  See charts 13 and 14, and table 3 for category growth and share.
• We estimate that in the 12 months to April, Australians spent $34.27 billion on online retail, a level that is around 10.4% of the total retail trade estimate (Preliminary April 2020, Series 8501, Australian Bureau of Statistics), and about 19.5% higher than the 12 months to April 2019.

NAB Chief Economist, Alan Oster commented:

Our NAB Online Retail Sales Index data highlights the extraordinarily strong growth in sales over the past couple of months. While official preliminary estimates for all retail sales showed a marked reversal of gains in March, our online series indicates that online spend accelerated in April. These are the highest growth rates we have recorded in the history of the current series, running since 2012. Similar growth rates have been recorded in overseas comparisons. The Office of National Statistics in the UK, for example, reports that online grew at 15.8% in the month. With the rapid growth in the series, and slowing in overall ABS retail estimates, online as a proportion of total retail sales is now 10.4% of all sales, up from 9.7% a month prior.

In the month, growth was strongest for the smallest sales category, takeaway food, which returned to growth after contracting in March. Second smallest spend share category, games and toys, has grown strongly over the past couple of months, so much so that its share of online has increased from about 6% 12 months ago, to almost 8% now. It seems that online activity by category has moved somewhat in phases over the past three months, initially led by strong growth in grocery and liquor as panic buying took hold. While that category continues a pace, a focus on home improvement and working from home were clear gains in March and April. Possibly with the easing of lockdown measures and some consumers still reluctant to go to physical stores, online fashion has re-emerged as a growth area after months of below average and negative sales growth.

The three most populous states represent just over 80% of all online sales, slightly above their share of the population. Of these three states, online sales growth in Vic.  and NSW grew most rapidly, with smaller spend share state, Tas. leading overall growth.

Both metropolitan and regional areas grew rapidly in the month, with regional slightly faster driven by regional Vic and regional NSW. In all other states, the metro areas grew more strongly.

In terms of merchant location, in April, sales at domestic retailers considerably outpaced their international competition. Not to say the performance of international retailers was poor in April. In an ordinary month, growth recorded by international retailers would itself be viewed as strong, but in April, domestic retailers recorded exceptional, double-digit growth. In addition, fashion, a key area for international merchants, was up strongly for domestic retailers, but negative in year-on-year terms for international.

For further details, please see the NAB Online Retail Sales Index April 2020.