Australia: Cashless Retail Sales Index continued to improve into February - NAB

The NAB Cashless Retail Sales Index for Australia continued to improve into February, a welcome trend after the weak sales experienced at the end of 2018, explains the research team at NAB.

Key Quotes

“Yearly growth in NAB’s cashless retail index picked up to 9.4% yoy, the fastest rate since mid-2016.”

“Yearly growth in the NAB Cashless Retail Index increased for all major industry groupings (excluding “other” retailing). Spending at cafes, restaurants & takeaways remained the fastest growing category (15.8% yoy) whilst spending on household goods jumped to be the second fastest growing sector (10.7% yoy). Other retailing (10.4% yoy), department store (10.1% yoy) and food (6.7% yoy) sales growth was solid. While clothing & footwear sales growth has lagged recently, the recent pick up has started to close the gap (4.8% yoy).”

“Annual spending growth has also strengthened across Australia. The Australian Capital Territory has surprised, taking the lead in terms of yearly growth at 10.4% followed by New South Wales (10.0% yoy), Victoria (9.6% yoy) and South Australia (9.3% yoy). Growth in Western Australia (7.8% yoy) has strengthened rapidly, and is now outpacing Queensland (7.4% 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. Likely reflecting the increasing popularity of online and contactless payments, the NAB Cashless Retail Index has continued to outpace the ABS measure of retail sales ((8.8% yoy versus 2.1% yoy in January).”

“Mapping through to the official ABS measure of retail sales suggests a month-on-month rise of 0.7% in February. We do note however that the ABS measure showed much slower growth than the mapped NAB measure in January (even adjusting for sample differences), suggesting some uncertainty around our estimate this month, or the possibility of revisions to the official measure.”