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Online sales fall annually for first time

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. 

Source: NAB

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.

Source: NAB
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