• Growth slowed for the NAB Online Retail Sales Index in September (3.3%), following an upwardly revised August (9.7%, previously 8.8%), on a month-on-month, seasonally adjusted basis.
• In year-on-year terms, the growth in the NAB Online Retail Sales Index accelerated in September (31.3% y/y). Year-on-year growth had begun to moderate earlier in the year, given the base effects from high growth for the same period 2020, but has accelerated with rolling lockdowns.

• Growth was recorded in month-on-month terms for all categories, except grocery and liquor. Fashion led growth in September, while department stores, which had accelerated rapidly in August, slowed in September. Large sales category, homewares and appliances also recorded strong growth above the overall index, along with takeaway food, games and toys, and personal and recreational goods. Despite the monthly contraction, in year-on-year terms, grocery and liquor was third fastest, behind department stores and takeaway food.
• Mixed results in month-on-month terms by state, with rapid growth in the eastern lockdown states offsetting a contraction in QLD and NT. All other states recorded mild growth. Growth was again led by ACT (23.2% mom, s.a.), followed by large sales states VIC and NSW. This month’s category lead, fashion, is being driven by the lockdown states, with rapid growth offsetting mild contraction in other states. For VIC and NSW, this was the fastest category, although for ACT, it was homewares and appliances.
• Monthly growth in online sales was again higher in metro areas relative to regional. The results were generally consistent with the headline, except in NSW and TAS, where more rapid growth was recorded for regional areas relative to metro. In year-on-year terms, however, NSW growth in metro areas is still about one and a half times that of regional.
• Sales growth was recorded for both domestic and international merchants this month. Sales growth for international merchants was particularly fast in fashion, which represents a considerable share of international merchant sales.
• NAB estimates that in the 12 months to September, Australians spent $52.04 billion on online retail, a level that is around 14.3% of the total retail trade estimate (August 2021, Series 8501, Australian Bureau of Statistics), and about 28.3% higher than the 12 months to September 2020.

NAB Chief Economist, Alan Oster commented:

In month-on-month terms, our NAB Online Retail Sales Index continued to grow in September, albeit slowing. Growth accelerated when comparing this September to the same month 2020, i.e. in year-on-year terms. The index continues to exhibit considerable strength, given that the base of September 2020 had already grown over 61% on September 2019.

Growth in monthly sales in September was highest for ACT. Contribution to headline growth was driven by two of the three key sales states, VIC, and NSW. In year-on-year terms, while all states were positive, ACT (90.7%) and NSW (68.7%) are driving the strong growth rate, with all other states growing under 20% year-on-year.

As lockdowns eased in September for QLD, growth in month-on-month terms contracted for all categories, except takeaway food, in that state. Indeed, the category results were quite mixed by state this month. While generally the highest growth by category continues for the lockdown states, cases of high growth were recorded for categories like homewares and appliances in the non-lockdown state of WA. Monthly sales growth for grocery and liquor continued in ACT and VIC, despite a contraction in all other states. Fashion recorded the fastest growth this month, and was fourth fastest over the year, with particularly strong growth in year-on-year terms for the category in locked down NSW and ACT.

Metro VIC led growth in the month, while regional NSW was second fastest. In QLD, the contraction was considerably worse for metro areas, which aligns with previous post-lockdown experiences. Having said that, in year-on-year terms, metro QLD is still up 15.5%. For most states, year-on-year growth was highest for metro areas, although for TAS, and to a lesser extent, VIC, regional growth outpaced metro.

In month-on-month growth terms, with domestic retailers slowing, international tended to outpace in most categories. This was particularly the case for key international sales share categories, fashion, and games and toys.  However, in year-on-year terms, these key international categories still grew faster for domestic retailers.

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