Australia: Strong growth in cashless retail sales in November - NAB

The Australian NAB Cashless Retail Sales Index shows strong growth in the month of November (1.6% mom) and was boosted by strength in household goods retailing (1.6% mom), particularly the electrical & electronic goods sub-category (+6.1% mom) in the same month that the new iPhone was released. 

Key Quotes

“There were also robust increases in spending at department stores, “other retailing” and cafes, restaurants and takeaways.”

“Mapping through to the official ABS official measure of retail sales suggests a more moderate increase in November, with our data/equations suggesting a forecast monthly increase of 0.4%. This may be because of divergence between the two series in October, although the NAB series also includes a larger share of online purchases, a difference which may become even more critical in the lead up to Christmas. NAB’s Cashless Retail Index does not include cash purchases, which also helps to explain the disparity in the growth rate over time.”

“We are likely to see a modest pickup in the yearly pace of growth in the official retail sales. Improvement also evident in NAB’s unmapped Cashless Retail Sales index to 7.8% after dipping down to 6.1% in September.”

“Looking specifically at the NAB Cashless Retail Sales Index, spending at cafes, restaurants & takeaways remains the fastest growing category (20.5% yoy), with spending at department stores also strong (16.9% yoy). Meanwhile spending on clothing & footwear (1.3% yoy) and household goods (2.4% yoy) has been subdued over the year, despite the pickup in the month of November.”

“By state, NAB’s Cashless Retail Index shows spending that is relatively broadly-based across the states with the exception of WA (1.2% yoy). The ACT is the standout (18.2% yoy), with NSW (8.7%), Victoria (8.4%) and SA (8.0%) broadly neck and neck, and Queensland not too far behind (6.3% yoy).”

“The NAB Cashless Retail Index is broader than the NAB Online Retail Index and measures all cashless retail spending by consumers using debit and credit cards (both in person and online), BPAY and Paypal. The index is derived from personal transaction data from NAB platforms (around 2 million transactions per day) and offers a 2-3 week lead on ABS retail trade data.”