Coronavirus brings record jump in NAB online sales index for April

The massive shift by consumers to shopping online during the coronavirus pandemic has brought a record lift in online sales.

Demand for takeaway food has rebounded strongly since March

The massive shift by consumers to shopping online during the coronavirus pandemic has seen the biggest ever monthly gain on the NAB Online Retail Sales Index since the internet shopping barometer began almost a decade ago, with takeaway food, games and toys leading the surge.

The index showed a 16.2 per cent gain on a month-on-month basis for April, the biggest jump in online sales growth over a month since the index began in 2012.

In year-on-year terms, the growth in the accelerated by 58.5 per cent compared to April 2019, which also set a record.

All eight categories within the NAB index recorded sales growth in month-on-month terms. While small in dollar value, takeaway food, and games and toys grew most rapidly, with takeaway rebounding from a contraction in March. Of the larger value categories, fashion led sales growth, also rebounding in April from negative sales growth in March.

The other big driver of the result was the largest sales category, homewares and appliances, growing at a pace slightly faster than the broader index.

The data “highlights the extraordinarily strong growth in sales over the past couple of months”, NAB chief economist Alan Oster said.

“While official preliminary estimates for all retail sales showed a marked reversal of gains in March, our online series indicates that online spend accelerated in April. These are the highest growth rates we have recorded in the history of the current series, running since 2012.”

Mr Oster said Australia’s burst in online shopping was mirrored overseas.

“The Office of National Statistics in the UK, for example, reports that online grew at 15.8 per cent in the month,” he said.

He said with the rapid growth, combined with a slowing in overall ABS retail estimates, meant online as a proportion of total retail sales was now 10.4 per cent of all sales, up from 9.7 per cent a month prior.”

Mr Oster said buying patterns had changed over the course of the lockdown period.

“It seems that online activity by category has moved somewhat in phases over the past three months, initially led by strong growth in grocery and liquor as panic buying took hold. While that category continues a pace, a focus on home improvement and working from home were clear gains in March and April.

“Possibly with the easing of lockdown measures and some consumers still reluctant to go to physical stores, online fashion has re-emerged as a growth area after months of below average and negative sales growth.”

The nation’s leading retailers such as Woolworths, Coles, Myer, Premier Investments, JB Hi-Fi as well as speciality stores like Adairs and Kathmandu have reported a rapid and strong growth in online orders since March as consumers went into home isolation and lockdowns.

With bricks and mortar stores closed and many shopping centres looking like ghost towns, shoppers have pivoted to online shopping with many analysts believing the resurgence of online shopping has accelerated its development in Australia by years. It has spurned a ramp up in demand for logistics suppliers, such as delivery businesses, to meet the insatiable demand for goods.