Online sales lose momentum, down $1 billion a month from COVID peak

Online sales lose momentum, down $1 billion a month from COVID peak

The trend towards buying online continues to lose momentum with the latest retail trade data showing consumers are spending $1 billion less per month than during the COVID-driven peak last August.

The data from the Australian Bureau of Statistics is supported by the NAB Online Retail Sales Index which showed a contraction in online sales during April after a revised dip in March.

On a seasonally adjusted basis, the ABS data reveals online sales have been edging lower over the eight months to the end of April despite a 1.7 per cent increase in March.

Online sales reached $3.12 billion, seasonally adjusted, in August last year. While the latest April figure has fallen to $2.91 billion, it is still $1 billion higher than February last year, ahead of the impact of pandemic lockdowns.

The pullback in online sales comes as the Australian Retailers Association (ARA) calls for a new round of support for Victorian businesses with the extended lockdown in Melbourne expected to cost more than $2 billion in lost retail trade.

Nevertheless, the ABS has urged caution in interpreting its online sales data, arguing that the series remains "experimental".

"Caution should be used in interpreting the results, especially during this volatile period," it says.

"It is worth noting that retailers have had to adapt sales channels very quickly during the pandemic, and it is possible that the value of online purchases has been under-reported since April 2020. Importantly, total retail sales will not be under-reported."

Monthly online sales fell in April for both the food group (down 2.3 per cent), and the non-food group (down 3.6 per cent) in seasonally adjusted terms.

On a year-on-year basis, April online sales are up 4 per cent compared with April 2020. The data in March showed a sharper year-on-year spike of 37 per cent.

"The change in through-the-year growth is due to the sharp rise in online sales in April 2020, when nationwide regulations saw restrictions on physical store trade across a range of retail industries," says the ABS.

"Total online sales have averaged an annual rise of 59.4 per cent between the 12 months of May 2020 to April 2021."

Meanwhile, Australian Retailers Association CEO Paul Zahra says state-imposed lockdowns were playing havoc with the retail industry, with retailers facing 33 days of lockdowns nationally in the first half of this year.

"If this virus has taught us anything, it's that our plans and progress can change very quickly with little notice," says Zahra.

"A week ago, our economic recovery was on track business confidence was at record highs and the Melbourne CBD was getting its mojo back. We were starting to think that the worst of Covid was behind us."

The ARA has called for targeted support for the retail industry in states where lockdowns are imposed, starting with Victoria.

"Victoria can't do this alone. The Federal Government has done a great job to keep businesses afloat through JobKeeper and we need them to step up to the plate again."

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