Online sales contracted again in December going down another 4.5 per cent, however, the data also showed that in year-on-year terms however, the index continued to grow, although slowing in December (8.2 per cent y/y).
NAB estimated that in the 12 months to December, Australians spent $52.93 billion on online retail, a level that is around 14.4 per cent of the total retail trade estimate (November 2021, Series 8501, Australian Bureau of Statistics), and about 19.9 per cent higher than the 12 months to December 2020.
All categories, except takeaway food, grocery and liquor and media, experienced a contraction in December, with the biggest loss being felt in the large sales category, homewares and appliances, and department stores, which was significantly worse than the overall index change. Personal and recreational goods were in line with the overall decline.
In year-on-year terms, takeaway food, grocery and liquor, department stores, and fashion recorded considerable growth in December. Given their weights in the index, for 2021, there has been a clear contribution to growth from both department stores, and grocery and liquor retailing.
Only South Australia and the Northern Territory escaped the grim figures with all other states recording a contraction in month-on-month growth in December, with NSW, ACT and Tasmania fairing worse than the overall, and Victoria slightly better (albeit still contracting). This was expected as the string of lockdowns ended in October, and in-store sales returned.
And regional areas experienced a greater contraction than metropolitan areas, the result heavily influenced by NSW, Victoria, Queensland, and South Australia. In contrast, the drop for Tasmania was more pronounced in metro areas. In year-on-year terms, growth in metro areas was considerably stronger relative to regional, except in Tasmania where metro contracted, and Victoria where metro and regional growth rates were on par in December.
Sales growth contraction was recorded for both domestic and international merchants this month, with international fairing slightly better in most categories, except media, and games and toys.
NAB chief economist, Alan Oster said it was worth noting that these recent monthly contractions are following on from the exceptionally strong “lockdown enhanced” growth in the third quarter of 2021.
“Heightened seasonality is also playing a role in the monthly numbers. The seasonal factors for October and November were slightly larger this year, indicating the growing importance of two key months in the online retail calendar,” he said.
“Even with the monthly contractions in growth, comparing this period to the same period 2020, i.e. in year-on-year terms, the index continues to grow. Given that the base of November and December 2020 had already grown 55 per cent and 40 per cent year-on-year terms respectively, the share of online retail sales continued to increase.”
