This article is from the Australian Property Journal archive
ONLINE retail sales activity contracted in June by 1.6%, according to NAB, stalling the momentum of strong growth seen in May.
The NAB Online Retail Sales Index was positive in annual terms, albeit barely, up 0.5%. The latest reading follows a recent report from m3property showed that while industrial land values and prime net rents have shown strong growth, and vacancies are low, softened online retail trade growth may translate into contraction in tenant demand for the logistics sector.
Vacancy rose over the March quarter, suggesting demand is no longer outpacing supply.
NAB estimates that Australians spent $29.32 billion on online retail in the 12 months to June, a level that is just over 9% of the traditional bricks and mortar retail sector, and about 12.7% higher than the 12 months to June 2018.
NAB chief economist, Alan Oster said online retail sales tend to be more volatile than broader retail, experiencing far greater monthly fluctuations, however the June reading is “markedly slower” than the same period in 2018.
“It is worth noting, however, that year-on-year growth comparisons are made to a period of elevated sales in 2018. At that time, major new online merchants established an Australian presence, and pre-GST exemptions were in effect,” he said.
June’s monthly fall followed 3.4% month-on-month rebound in May.
“The headline result for June appears to be a result of sluggish growth in most categories, combined with a significant sales contraction in media, and the largest spend category, homewares and appliances,” which was down 7.1%. Grocery and liquor also fell.
After weak sales growth earlier in the year, the small sales category of takeaway food led both month-on-month and year-on-year growth, in a period of structural changes in the sector by way of high profile exits and consolidation.
Grocery and liquor, which represents around 14% of the index, dipped slightly in the month, but grew over the year.
All states and territories except Western Australia (2.4%) and ACT (4.5%) recorded a contraction in monthly sales growth, with Tasmania (-6.4%) the heaviest hit.