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NAB's Online Retail Sales Index (NORSI) recorded a 3.8% decline in online sales in April on a month-on-month seasonally adjusted basis (mom, s.a.).

All eight categories that NORSI monitors contracted on a mom s.a. basis in April. However, despite declining during the month, the games and toys category faired the best, only slipping 0.2% in April.

In year-on-year terms (yoy) compared to April 2018 – one of the strongest recorded months – April 2019 remained positive, up 1.7%.

The results for April are indicative of broader challenges in retail, NAB cheif economist Alan Oster said.

"Our NAB Online retail sales index data indicates considerable weakness in online retail sales for April 2019. The online retail sales, tend to be more volatile than broader retail, experiencing far greater monthly fluctuations.

"This month, both online retail and broader cashless retail series indicated very weak retail conditions. While yoy growth in online sales has also slowed considerably in recent months, these comparisons are made to a period of elevated sales in 2018, with major new merchants to Australia, and also pre-GST exemption effects.

"By category, department stores continued to lead yoy growth. In the month, all categories experienced a contraction in sales," he said.

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Source: NAB Online Retail Sales Index April 2019

Geographically, Tasmania was the weakest during the month. Meanwhile, international retailers outpaced domestic retailers in on a mom basis.

"Tasmania, with about 2% of online retail sales, was weakest in April, after leading growth in March," Oster said.

"New South Wales, Victoria and Queensland represent over three quarters of the online market in Australia by sales value. Of these larger sales states, Queensland was strongest over the year.

"By merchant location, domestic online retailers continue to outpace their offshore counterparts, with international slowing in yoy terms. However, domestic retail sales contracted in the month (down 4.4% mom, s.a.), while their international counterparts recorded mild growth (up 0.7%)."

NAB estimates that in the 12 months to April 2019, Australian consumers have spent $28.98 billion on online retail, a figure which is approximately 9% of the bricks-and-mortar spend.

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