Australian online retail sales are soaring

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It seems many Australians did over the past year. Tom Cooper/Getty Images for eBay
  • Australian retail sales grew by a paltry 2.6% in the 12 months to April, according to official ABS data.
  • This largely reflects subdued growth in household incomes, along with intense competitive pressures keeping retail inflation low.
  • Macquarie Bank says around 60% of total growth in sales over the past year came from online retailers.

Australian retail sales grew by a paltry 2.6% in the 12 months to April, according to official data released by the Australian Bureau of Statistics (ABS).

At a time when Australia’s population is growing at over 1.6% per annum, it suggests demand and inflationary pressures across the retail sector are soft, continuing the themes seen in recent years.

That largely reflects subdued growth in household incomes, along with intense competitive pressures, especially from online retailers.

As seen in the chart below from Macquarie Bank, of the 2.6% growth in total retail sales over the past year, a mammoth 60% came from sales at online retailers.

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“Pure play” retailers are those that sell goods on their own website. Multi-channel online retailers are those who use multiple platforms to sell to consumers.

Given the increasingly digital world in which we live, and the recent arrival of Amazon to Australia, it’s hard to see recent trends reversing anytime soon.

It also suggests that sales and margins at traditional bricks-and-mortar will remain pressured, especially as their cost base is often higher than for online operators.