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Online retail sales show biggest monthly drop on record

Online sales have weakened in February, posting the biggest monthly drop on record, NAB’s Online Retail Sales Index show.

NAB’s Online Retail Sales Index revealed a 3.4 per cent drop on a month-on-month seasonally adjusted basis in February. In year-on-year terms, online retail sales was barely positive, up 0.5 per cent, also the lowest result in the series history.

Overall, transaction volumes are growing but the average spend per transaction is falling.

All categories recorded a month-on-month decline in sales, with the largest contraction shown in the largest sales category, homewares and appliances (-4.5 per cent).

Year-on-year growth is positive for four of the eight NAB Online Retail Sales Index industry groupings.

“While department and variety stores remains the fastest growing category in year on year terms (22.0 per cent), it was the fourth worst performing category in month on month terms,” according to NAB.

Fashion sales recorded the least negative growth in the month and were flat over the year, partly due to the impact of buy-now, pay-later payment methods.

The biggest average spending falls were in grocery, liquor and media sales, while the biggest gains in average spending were in department store sales and takeaway food.

Victoria and New South Wales were the only two states to record growth in year-on-year terms, with Victoria showing a 3.8 per cent increase and NSW 2.3 per cent.

Queensland’s year-on-year sales growth was almost flat, -0.2 per cent, while Western Australia, which had been growing rapidly in recent months, recorded the largest drop in sales growth of major sales states in February.

NAB’s data showed domestic online retailers performed better in month-on-month terms relative to international competitors.

According to NAB, it is estimated that in the 12 months to February, Australians spent $28.92 billion on online retail, a level that is equivalent to around 9.0 per cent of the traditional bricks and mortar retail sector (which totalled around $321.54 billion in the year to January 2019 according to the Australian Bureau of Statistics).

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