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Retail sales slip in August, though online growth continues

Retail sales fell 4 per cent during August, following a 3.2 per cent rise seen in July and 2.7 per cent in June.

The result was severely impacted by the implementation of Stage 4 restrictions across Melbourne, which has historically been one of the leading states in regards to sales.

When announcing preliminary results last week, ABS director of quarterly economy wide surveys Ben James said Victoria had seen large falls across every industry except food.

And although sales in Victoria saw the steepest decline most other states also saw fewer sales, with the average excluding Victoria still down 1.5 per cent.

According to the ABS, online sales made up 7.5 per cent of total sales for the month, with pureplay retailers making up 32 per cent of online sales.

The total online sales figure rose 7 per cent during August, following a rise of 6.3 per cent in July.

The data backs up the details of the NAB Online Retail Sales Index, which said online retail continued its upward trajectory in August, growing 4.2 per cent month on month and 60.6 per cent year on year.

While the growth was strong, but once again it was not as impressive as July’s record result, which saw 6.7 per cent growth month on month and 62.6 per cent year on year.

Much of this growth was, as expected, seen in Victoria.

“This data incorporates a full month of stage 4 restrictions in metropolitan Melbourne,” said NAB chief economist Alan Oster.

“The lock-down is clearly impacting the result as businesses adapt, with contactless pickup and discounted or free delivery.

“In year-on-year terms, online sales in Victoria are more than double what they were in the same month 2019. This is well beyond any Christmas period trading that we have observed for Vic online retail in both growth and absolute dollar terms. The state also led growth in each category, except media, and takeaway food in the month.”

The department store sector saw the most success in August, followed by games and toys, and personal and recreational spending. The largest sales category, hardwares and appliances, was flat, while media spending was the only category to contract.

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