Online retail sales growth slows, retail turns negative
Online retail sales have recorded another month of double-digit year-on-year (y/y) growth, up 14.2 per cent, a slight slowdown from the 15.3 per cent y/y figures in February.
National Australia Bank’s online retail sales index tracked $25.3 billion in e-commerce spending in March, totalling around 8.1 per cent of the traditional bricks-and-mortar sector.
Month-on-month (m/m) figures accelerated, up 0.9 per cent in March compared to 0.6 per cent in February.
By category toys, up 34 per cent y/y, media, up 22.6 per cent y/y, and department stores, up 22 per cent y/y, experienced the strongest growth.
Fashion dipped off though, up 6 per cent y/y in March after spending grew by 10.9 per cent in February. NAB warned this category is difficult to track though due to buy-now-pay-later services.
Department store spending is still being driven by international retailers, although the domestic market now accounts for more than 80 per cent of online retail sales in Australia.
Broader retail conditions turn negative, NAB
Ahead of the release of ABS trading data on Tuesday, National Australia Bank’s monthly business survey has also tracked some bad news for the broader retail sector.
Not only does retail remain the weakest sector in the economy, but NAB’s index for the industry has turned negative for the first time this year, signalling a deterioration in conditions.
While the overall business confidence inched up two points to +10 in April, retail lagged behind for yet another month.
NAB’s chief economist Alan Oster said while the result is concerning it is somewhat positive that retail weakness appears not to have spread to the retail and personal services sector.
“On a more positive note, concerns that retail weakness might be spreading to retail and personal services have been alleviated by a significant improvement in conditions in that industry over the last two months, particularly in April,” he said.
Retail prices also increased in April following a decline in March, up 0.2 per cent as purchase cost growth slowed, NAB said.