Online retail sales have sagged as a spending frenzy fades in the aftermath of the government’s budget-related small businesses tax cuts.
The latest NAB Online Retail Sales Index shows a 1.4 per cent dip in July, a significant deterioration on the revised 2.3 per cent growth recorded in June.
NAB’s chief economist, Alan Oster, said Treasurer Joe Hockey’s $20,000 instant asset write-offs for small businesses, announced in the May budget, could have contributed to the June surge. That is a key reason why June was so strong and a comparatively weak July result.
Despite the slowdown in July, online sales rose 6.2 per cent to $17.4 billion in the year to July.
NAB said sales increased year-on-year across all retail categories except specials on ‘daily deals’ websites, with electronic games and toys leading the way despite slowing from the previous month.
Growth also accelerated in sales of media items, homewares, and appliances.
Fashion, grocery, and liquor sales rose at more moderate single-digit rates, while the Sales Index reported department and variety stores had much slower growth than in June.
Online sales now make up around seven per cent of traditional retail spending.
Hanrick Curran has expertise in advising retailers, both online and bricks & mortar, addressing the unique challenges and opportunities that present to this industry including importing, inventory management, margin management and premises optimisation. For assistance in growing your retail operation, contact our Business Advisory specialists, Matthew Beasley, Kim Hanrick and Nathanael Lee.
Click here for a full copy of the July NAB Online Retail Sales Index.