Growth, inflation and labour market all easing
NAB Online Retail Sales Index contracted in October, following on from lockdown enhanced strong growth in recent months.
NAB Chief Economist, Alan Oster commented:
In month-on-month terms, our NAB Online Retail Sales Index contracted in October, following on from lockdown enhanced strong growth in recent months. Despite the monthly contraction, comparing this October to the same month 2020, i.e. in year-on-year terms, the index continues to exhibit considerable strength, up 21%. Given that the base of October 2020 had already grown over 57.6% on October 2019, the share of online retail sales continued to increase.
The contraction in monthly online sales in October was driven by the ACT, NSW, and VIC. These three had seen strong online sales growth during the lockdown periods over the past few months, and the current monthly result is likely to be partially reflective of an easing in restrictions during October. Interestingly, WA also contracted, suggesting separate factors at play for that state. In year-on-year terms, while all states were positive, ACT (67.4%) and NSW (38.6%) are driving the strong growth rate, with all other states growing under 20% year-on-year.
As lockdowns eased part way through October, growth in month-on-month terms contracted for all categories. The results were generally consistent where restrictions were eased, except ACT for takeaway food, which continued to grow in the month. Tas, which entered a short lockdown during the month, went against the broader trend for some categories, but particularly large sales category, homewares and appliances. The category which led the monthly contraction, department stores, was uniform except NT. While grocery and liquor also contracted in the month, it recorded strong year-on-year growth, so given its relative size, it has contributed heavily to the year-on-year growth in the index. See this month’s heatmap for more detail.
Metro areas, which had grown more rapidly in recent months, recorded a larger contraction in October. Coinciding with the Hobart lockdown, metro TAS led growth in the month, while an easing in restrictions saw metro NSW lead the falls. For most states, year-on-year growth was highest for metro areas, with the exception of VIC and TAS. Part of the reason for this is the pattern of growth during the 2020 lockdown, where metro VIC had already experienced significant growth, whereas 2021 lockdowns included greater restrictions in regional areas.
Get all the insights in the NAB Online Retail Sales Index (October 2021)
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