NAB released its October Online Retail Index earlier today and I’ve held off reporting it until regular retail sales for October were out. Going against the solid pick-up in bricks and mortar retailing, online sales are falling very fast. Growth in October was just 0.3% month on month, below that of traditional stores at 0.5%:
What’s more interesting is that international sales are falling more swiftly than local:
And a trend of same is developing in market shares:
It’s not conclusive and the correlations aren’t perfect but it’s a reasonable supposition to suggest that the falling dollar (which began mid year) is beginning to turn around local retailers fortunes.
As well, the categories that NAB cites as slowing online do match with those that are picking up most in tradition retail: Daily Deals, Recreational & Personal Goods, Fashion and Toys & Electronic Games online versus much the same discretionary stuff in store:
Retail has become a tradable sector at the margin in recent years. The substance of that was confirmed today in the news that the ABS increased Australia’s current account deficits by a billion and change for each of the past few quarters by accounting for online spending. That’s material.
If this is the case then consumer spending may have an upside surprise in store for retailers and growth alike next year. In the end, for all the guff we’re fed about confidence, it’s competitiveness that cuts the mustard.
Full NAB report here.
