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ONLINE retail sales surged in February in the latest sign of change gripping the sector and putting pressure on the industry's largest players.
National Australia Bank's online retail sales index jumped 26 per cent in the year to February 29, up from a rise of 19 per cent in the year to January 31. The monthly online index rose to 168.1 points in February from 158.9 points in January.
''This increase was particularly notable given that February 2010 and 2011 recorded little to no growth when compared with the preceding month of January,'' said NAB chief economist Alan Oster.
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Online sales, while representing only about 5 per cent of the $216 billion-a-year retail trade, are tipped to continue to boom even as industry stalwarts like David Jones, Myer and Harvey Norman struggle with tepid sales and a string of profit downgrades.
Last month, David Jones flagged a first-half profit fall of 19.6 per cent from a year earlier and warned that full-year profits could be down by 40 per cent as it battled to adapt to the new reality of online trade. It also announced an ambitious $160 million digital makeover. David Jones' problems echo those of Harvey Norman, which years ago dismissed the potential for online sales but has now capitulated to the trend.
By comparison, online sales site eBay Australia said last month that revenue at its top 2000 sellers rose by 45 per cent over the year to January.
Consumers broadly have switched to saving more of their income in recent years in response to a less certain outlook for the economy and a desire to pay down debt after sharp rises in home values in the past decade. At the same time, more consumers are embracing the internet for shopping. The strong Australian dollar has further fuelled the trend of consumers purchasing from businesses overseas.
In the NAB data, February online sales showed an increase in spending at florists for Valentine's Day as well as bookshop spending at the start of the first term for universities. The extra day of the month in February may also have lifted the monthly result, the bank said.
Official Australian Bureau of Statistics retail sales data will be released today, with the market expecting a 0.2 per cent rise in February following a 0.3 per cent increase in January. Last year was the weakest year on record for traditional retail sales growth, ABS data showed. The NAB online data is non-seasonally adjusted and compiled by data analytics group Quantium.
Read more: http://www.smh.com.au/business/cupid-gives-online-sales-a-boost-20120402-1w8px.html#ixzz1s9fiQb9P
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