The scale, volatility and complexity of lockdowns makes it exceedingly difficult to draw strong conclusions about spending trends from our Westpac Card Tracker Index.
Melbourne’s snap seven-day lockdown last night, its sixth since the pandemic began, is just the latest case in point.
Still, the trend is clear at a headline level, the Index – based on the millions of credit and debit card transactions processed by Westpac every day – continuing its recent decline, down 0.9 points to 98.7 for the week ending July 31, a 12-month low.
This means annual growth in card activity is now running 1.3 percentage points below its pre-COVID pace, dragged down this week by weakness in Victoria and, unsurprisingly, locked down New South Wales. Remarkably, South Australia’s large fall puts its Index below NSW, with Queensland and Western Australia the only major states to record reads over 100 – indicating transaction growth is running above its pre-pandemic pace.
However, one positive showing though is a big shift to online sales in NSW and Victoria.
Drilling into the detail in NSW, the trend has been particularly pronounced across a handful of segments: department stores, discount stores, electrical and electronics, clothing and sporting goods and toys. In these, the share of online sales has jumped to 80 per cent on a combined basis, virtually doubling during the “Delta” lockdown.
In addition, in most cases it’s materially above the peak shares seen during last year’s national lockdown.
What’s going on?
On the one hand, consumers are becoming more familiar with shopping online. On the supply side, retailers are likely also improving their scope and ability to service via online channels.
While not be enough to cushion lockdown shocks entirely, it suggests we are developing some better buffers to the disruptions.
Six weeks into a lockdown, at least that’s one positive.
Read our full report at Westpac IQ.
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