Online retail sales have contracted by a seasonally adjusted 3.9% month-on-month in December, following a robust November that witnessed a significant growth of 6.5%, the NAB Online Retail Sales Index showed.
In year-on-year terms, growth slowed in December, standing at 11.4%. It's important to note that this metric is compared to a period when growth was still in contraction.
“While we observed a contraction in online sales growth in December, for context, this followed considerably strong October and November results,” said Alan Oster (pictured above), NAB chief economist.
“When these results are aggregated for the December quarter, this has translated into high single-digit growth when compared to the September quarter, and low double-digit growth when compared to December quarter 2022.
“This growth has also revived the 12-months-to metric, albeit at a more moderate pace relative to what we observed during lockdowns. Part of this, as we have alluded to in past reports, reflects base effects of the comparison period.”
Oster highlighted the evolving seasonal patterns in online retail sales, emphasising the growing significance of November compared to December.
“As consumers adapted to a combination of factors, like delivery schedules and sales events, the importance of November in the online calendar has grown to a point where the dollars spent in this month are about 1.25 times the December spend, and 1.5 times the sales of the average month for the rest of the year,” Oster said.
“As online retail sales gradually increase its share of total retail sales, it is likely that this change to seasonal patterns will become more apparent in the broader series.”
December witnessed a broad-based contraction across categories, particularly in the largest sales category – homewares and appliances, games and toys, and department stores. Interestingly, these same categories led growth in November. In year-on-year terms, personal and recreational goods continued to be the frontrunners.
Across states, all recorded growth contraction in December, with the smaller states generally faring worse. New South Wales and Victoria, having recorded substantial growth in November, contracted at a relatively smaller rate compared to smaller sales states.
While a larger contraction was recorded in metro areas in December, their growth in November far exceeded regional areas. In year-on-year terms, metro areas continued to lead, though the gap between the two remains relatively small compared to previous years.
Meanwhile, both domestic and international retailers recorded a contraction in the month, with domestic retailers performing worse. However, it's crucial to contextualise this by acknowledging that domestic retailers outpaced international ones by a considerable margin in November.
NAB estimated that Australians spent $55.11 billion on online retail in the 12 months to December, constituting around 13% of the total retail trade estimate. This reflects moderate growth (2.8%) compared to the 12 months leading to December 2022.
For further insights and detailed data, refer to the complete NAB Online Retail Sales Index report.
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