Online sales fall annually for first time

Dean Blake

3rd Sep 2019

Online sales fell 1.1 per cent in July compared to the same period last year – the first time online sales have contracted on a year-on-year basis, as recorded by the NAB online retail sales index.

However, the result is being compared to a period of elevated sales in 2018, with Amazon launching its Prime service in Australia in a pre-online-GST environment, said NAB chief economist Alan Oster. 

Online growth in July 2018 was at a rate of 24 per cent. 

“The weak result for the largest sales category, homewares and appliances contributed significantly to the headline result. With a couple of exceptions, sales for this category has been on the weaker side since October 2018,” Oster said. 

“The much smaller spend takeaway food led both month-on-month and year-on-year growth in July.”

NAB estimates that Australians spent $29.33 billion online in the year to July, 11.5 per cent higher than the year prior, and 9 per cent of bricks-and-mortar spend as measured by the Australian Bureau of Statistics. 

Half of the online retail categories measured by NAB saw online sales fall over the year. 

Fashion, homewares and appliances, media and recreational all saw spending decline, while department stores, grocery and liquor, games and toys, and takeaway food all grew.

“Albeit a small sales state, Tasmania had recorded a considerably strong result in March, but since that time has been persistently negative and is now down markedly in year-on-year terms,” Oster said. 

“While sales growth across all states were weaker in the month, Vic, SA and NT remained positive in year-on-year terms, though this was not sufficient to reduce the effect of the sales growth decline from the other states.”

Additionally, while international retailers saw positive growth month-to-month of 0.6 per cent, on an annual basis they remained negative – having started a steep decline in July 2018 as the revised GST-provisions came into effect.