Retail sales for July is out today. NAB has released its online version and it’s not great:
The NAB Online Retail Sales Index contracted (-2.0%) in July on a month-on-month, seasonally adjusted basis. This follows a contraction in June (-1.8% mom, s.a).
In year-on-year terms, the NAB Online Retail Sales Index contracted (-1.1% y/y s.a.) in July after a barely positive June (0.1%). This is the first time in the series history where the series has contracted in year-onyear terms. It is worth noting that this result is compared to July 2018 where growth was 24%.
July data shows sales for five of the eight online retail categories contracting in month-on-month growth terms. The largest sales category, homewares and appliances (-6.5% mom, s.a.), was a key contributor to the headline result given its relative weight in the index. Media, personal and recreational goods, fashion and department stores also contracted in the month. The smallest sales category, takeaway food, again recorded the fastest growth in the month.
In month-on-month terms, all states and territories recorded a contraction in sales growth. Tasmania (-5.2%) led the monthly decline in sales growth along with WA and NT.
In July, the contraction in spend growth was more pronounced in regional areas at -3.9% (mom, s.a.), relative to metro, led by regional Tasmania (-7.7%). WA and SA metro areas went against the broader result to record considerably weaker online retail spend growth relative to regional areas in the month. See Charts 15 and 16 for more detail.
At -2.7%, domestic online retailers performed considerably worse in month-on-month terms relative to international competitors which remained positive in the month (+0.6% mom, s.a.). However, in year-onyear terms, from our series, considerable weakness in international online sales remains.
We estimate that in the 12 months to July, Australians spent $29.33 billion on online retail, a level that is just over 9% of the traditional bricks and mortar retail sector (June 2019, Australian Bureau of Statistics), and about 11.5% higher than the 12 months to July 2018.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
