Sales promotions drive modest jump in online retail sales: NAB

Australians spent $59.9 billion on online retail in the 12 months to December, according to NAB’s December Online Retail Sales Index. Online retail now makes up 13.8 per cent of Australia’s total retail trade estimate.

Growth accelerated to 18 per cent in year on year terms in December, compared to November’s year on year growth of 13.3 per cent.

Consumer spending saw a large up-tick during Black Friday and Cyber Monday sales, which respectively occurred in late November and early December. Online retail has become an increasingly important avenue of trade throughout these sale periods, according to NAB.

“In 2024, over 35 per cent of all retail trade that occurred during these four days was conducted online. This is up markedly over the period we have been monitoring the series,” said NAB chief economist Alan Oster.

“For example, in 2012 it was about 9 per cent, and as recently as 2022, it was just over 25 per cent.”

By category, growth was mixed in December. Fashion recorded the largest up-tick in November, but partially reversed those gains in December.

Grocery and liquor spending saw a strong drop in December, while strong growth in takeaway food sales and slower growth for department stores and personal goods barely offset this.

Metropolitan growth in online retail continues to outpace regional growth on a year-on-year basis, with metro growth accelerating slightly in December while regional growth plateaued.

International retailers grew in December, while domestic sellers contracted slightly after surpassing international sales in November. Domestic retailers continue to grow faster than international on a year-on-year basis, however this gap has narrowed according to NAB.

Taking a broader look at trade, ABS data for December 2024 showed that total trade fell by 0.1 per cent month-on month, but rose 4.6 per cent compared to December 2023.

“Cyber Monday fell in early December and boosted spending to begin the month, particularly on discretionary items like furniture, homewares, electronics and electrical items,” said Robert Ewing, ABS head of business statistics.

According to ABS data, retail volumes rose (0.5 per cent) on a per capita basis for the first time since the June quarter of 2022.

“Per capita retail spending has risen for the first time in over two years. The rise coincides with an easing of retail price growth and with cost-of-living relief measures,” Ewing said.

This retail trade data will likely feed into the RBA’s February interest rate decision, alongside global trade uncertainties stoked by emerging tariff policies.

“Important data points – like today’s Retail Sales data – will enter the RBA’s thoughts as it decides whether to cut Australian interest rates at the February Board meeting in two weeks’ time,” Ivan Colhoun, Chief Economist, CreditorWatch said of the ABS trade data released Tuesday.

“I expect the Bank to reward borrowers for the progress made in slowing inflation, and in so doing, insure against a further slowing in growth or an unnecessary rise in the unemployment rate.

“That’s all before the very large tariff increases now beginning in the northern hemisphere, which will impact prices in countries that levy tariffs, and no doubt also affect global supply chains and pricing in coming months,” Colhoun qualified.