January 2020 Online Retail Sales
27 February 2020
- January was a soft month for New Zealand’s online retail spending, with total spending down 1% on January last year (excl GST).
- The decline is driven by a large year-on-year drop in spending at offshore sites, which was down 12% on last January (excl GST).
- This is slightly larger than the 9% year-on-year decline we saw for overseas sites in December, which followed the widening of GST charges on 1 December.
- If we add back GST, the international spending would be close to what it was a year ago. This suggests that consumers are spending a similar amount to last year at overseas sites, but less spending is going to offshore retailers (most likely because of lower purchase volumes) and more is going to IRD.
- Local retailers win from a more level playing field for pricing and would hope to see an improvement in volumes over time, at the expense of the offshore competitors. We might not see all the gains for local retailers show up in the online shopping space. For example, a customer may pick up a book from their local physical bookstore that they might otherwise have purchased from an offshore online site.
- Looking at offshore spending by store type, a lot of categories saw spending fall by an amount similar in size to the increase in GST. A notable exception was Newspaper and Book retailing, which was down more than 25% on January last year. Department store online spending went against the trend and was up nearly 20% compared to a year earlier.
- Growth in spending at local online sites was up 7% on January last year. Purchases of Electrical and Electronic goods featured strongly.
- Annual online spending across the retail categories we cover is running at $4.8 billion (excl GST). This is equivalent to 8% of total retail sales reported in Statistics NZ’s Retail Trade Series (RTS), comparing like-for-like categories. Excluding the Food and Liquor sectors from both the RTS and our Index, annual online spending is equivalent to 11% of retail sales.
Read the full BNZ Online Retail Sales Index report PDF 293KB
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Previous online retail sales reports
· Spending growth at offshore sites showed a small increase in October, with online spending inching up 1% on October last year.