Australian consumer spending plunges as online sales lose momentum

Australian consumers are spending $1 billion less per month than during the coronavirus -fuelled peak in August last year, the latest retail trade data shows, as the trend towards online buying continues to lose momentum.

The ABS data was supported by the NAB online retail sales index, which showed online sales contracted in April after a revised March.

On a seasonally adjusted basis, ABS data showed online sales had fallen in the eight months to the end of April, despite a 1.7 per cent rise in March.

Online sales hit $3.12 billion in seasonally adjusted terms last August. Although the latest figure for April has fallen to $2.91 billion, it was still $1 billion higher than last February, before the impact of the pandemic lockdown.

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

Still, the ABS urged caution in interpreting its online sales data, arguing that the series is still in its "experimental phase. Caution should be exercised in interpreting the results, particularly during this turbulent period . It is important to note that retailers have had to adjust sales channels very quickly during the pandemic and the value of online shopping since April 2020 may have been underestimated. It is important that total retail sales are not underestimated."

Monthly online sales in both food (down 2.3%) and non-food categories (down 3.6%) declined in April on a seasonally adjusted basis .

Online sales in April increased 4% year-on-year compared to April 2020. Data from March showed a year-on-year increase of 37%.

The ABS said: "The change in full-year growth is due to a sharp rise in online sales in April 2020, when national regulations restricted physical store trading across a range of retail sectors . In the 12-month period May 2020 to April 2021, total online sales grew by an average of 59.4 per cent per annum.

Meanwhile, Australian Retailers Association chief executive Paul Zahra said state-imposed lockdowns were wreaking havoc on the retail sector, with retailers facing 33 days of lockdown across the country in the first half of the year.

"If this virus has taught us anything, it's that our plans and progress can change quickly without us noticing," Zahra said. "A week ago, our economic recovery was on track, business confidence was at an all-time high and Melbourne's CBD was coming back to life. We were beginning to think the worst of Covid was over."

Online retail in Australia remains fraught with uncertainty.

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