Online retail spending grew 1.6 per cent in February, after contracting 0.3 per cent in January, according to the NAB Online Retail Sales Index. This was faster than the 0.5 per cent rise in overall retail sales, as recorded by the Australian Bureau of Statistics.
In both cases, the increase in spending was driven by a surge in grocery sales, as consumers stocked up on food, liquor and essentials like toilet paper amidst growing concerns over the coronavirus.
“It is likely that panic buying in February provided an additional boost to an already rapidly growing category,” Alan Oster, NAB’s chief economist said.
Oster noted that while online grocery and liquor sales rose 22.7 per cent year on year in February, they were also up over 17 per cent year on year in January.
“This category has been growing at a relatively steady pace for the past year and now represents almost 15 per cent of all online retail sales,” Oster said.
Takeaway food, which is typically the fastest growing category each month, was effectively flat, bucking the trend in overseas markets of rising takeaway food sales as restaurants and cafes have been forced to shut. Homewares and appliances, the largest online sales category by spending, contracted slightly in the month.
NSW recorded the strongest growth from January, and only WA and Tasmania saw a decline in online sales. In year on year terms, all states and territories recorded double-digit growth. Metro areas, which make up two thirds of all online spending, saw stronger growth than regional areas, and international merchants slightly outperformed domestic merchants.
“Online sales for international merchants contracted heavily for the same period in 2019, so much of the recent rebound in growth is off a smaller base,” Oster explained. “Domestic merchants, which make up the vast bulk of sales, grew slightly below the overall rate, but contributed more heavily to the total boost.”
The full impact of the coronavirus on consumer behaviour will likely be reflected in the March sales figures.