Online retail sales surges in October – NAB

Growth was broad-based, across both category and state levels

Online retail sales surges in October – NAB

Online retail sales saw accelerated growth month-on-month in October, with seasonally adjusted growth at 3.3%, building on a revised September estimate of 0.7% (originally reported as 2.9%), according to NAB.

The NAB Online Retail Sales Index also demonstrated growth acceleration in year-on-year terms, up 9.6% from the same period last year, despite a downward revision to the September estimate.

“We observed strong growth in October, following on from a rebound in September,” said Alan Oster (pictured above), NAB chief economist. “Our growth estimate for September was revised down significantly, with a particularly strong revision to our estimate for international retailers.

“The growth pattern of the online series is somewhat at odds with our broader measure of retail spending. For that series, growth for retail was revised up in September and contracted in October.”

According to NAB estimates, Australians spent $54.36 billion on online retail in the 12 months to October, accounting for roughly 12.8% of the total retail trade estimate. This marks a return to growth (1.3%) relative to the same period in 2022.

Broad-based retail sales growth

Oster also noted a broad-based growth in October. Leading the growth were personal and recreational goods, marking a resurgence in fashion, grocery, and liquor sales. All other categories exhibited growth above the overall, excluding homewares and appliances, as well as games and toys. Personal and recreational goods also took the lead in year-on-year terms.

Media was the sole category to register a monthly contraction and experienced a slowdown in year-on-year terms. However, it's worth noting that this occurred after a mid-year period of stronger than average growth.

Growth was also recorded in all states in October, although Queensland experienced a deceleration after a period of rapid expansion the preceding month. Tasmania, on the other hand, demonstrated rapid growth this month after a contraction in September. This trend held true for most categories, particularly in homewares and appliances, except in fashion and media. In year-on-year terms, all states exhibited growth, with Western Australia and South Australia leading the way.

Metro vs regional performance

In year-on-year terms, although metro areas initially exhibited stronger growth, there has been a convergence between the two. A year ago, online sales in metro areas faced a stronger post-lockdown slump compared to regional areas. The recent convergence suggests a robust monthly performance in metro areas over the past couple of months.

Domestic and international retail sales

Both domestic and international retailers registered online retail sales growth in October, with domestic retailers outperforming their international counterparts. In year-on-year terms, growth for international retailers lagged behind the overall figure.

Read the NAB Online Retail Sales Index: October 2023.

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