Latest figures show slowing growth online, while UK retail sales manage a modest increase overall
Latest figures show slowing growth online, while UK retail sales manage a modest increase overall
Last month’s retail sales were estimated increased to have compared with August last year, according to the Office of National Statistics (ONS) August 2012 retail sales figures.
The August IMRG Capgemini eRetail Sales Index also found British shoppers spent £5.8bn online in August, which amounted to year-on-year growth of 11%, but a drop of 11% on July’s growth.
The ONS said August sales, which include stores and online, reflected the underlying year-on-year upwards movements seen in the retail sector since August 2011.
But it also said, this was not a long-term pattern for the volume of sales, which overall, between 2007 and 2012, have stayed relatively flat.
Wider growth remains flat
Compared with the same month last year, the ONS said that the amount of goods bought in the retail sector in August 2012 was estimated to have increased by 2.7%. Over the same period, the amount spent in the retail sector was estimated to have increased by 3.0%.
Looking at the monthly picture, like online only, it also found a drop off in growth from month to month. It estimated that the amount of goods bought in retail stores (August 2012 compared with July 2012) fell by 0.2%, following a 0.3% rise in July 2012. Over the same period, the amount spent was estimated to have increased by 0.2% following a 0.7% increase in July 2012.
Annual estimated store price inflation remained at 0.2%. And, as included in the Consumer Prices Index, the main source of downward pressure came from a fall in prices at stores selling household goods and clothing.
The ONS figures also found that the proportion of internet sales decreased by 0.9% between July and August 2012. Compared with a year ago, the proportion of internet sales in August 2012 increased by 0.3%.
While a decline in online sales between July and August is typical (-6% in 2011 and -8% in 2010) with the start of the autumn school term, the IMRG noted that the decline was particularly significant this year.
Online remains source of growth
Despite the disappointing performance, and in contrast to the wider retail sector, the e-commerce trade body was at pains to point to growth – in terms of the year to date the Index has grown 13%, as per earlier forecasts.
Growth in the electrical sector fell to just 11% and reported a month-on-month decline of 2%. Despite the arrival of autumn-winter ranges and the late summer sales, the clothing sector failed to attract customers, recording growth of only 11% year-on-year and dipping 18% on July last month. And the travel sector experienced annual growth of 9% and dropped 7% month-on-month.
In contrast to the overall Index results, gifts and health & beauty grew 41% and 25% year on year, respectively.
Likewise, m-commerce sales, including shopping via mobile devices, continued to perform particularly well in August, with the IMRG’s m-Retail Index reporting a growth of 294% on the same time last year.
Year-on-year growth of online-only retailers continues to exceed that of multichannel retailers, growing 15% year-on-year as compared to the 8% growth of their multichannel counterparts. In the last three months online-only retailers have been growing by an average of 6% year-on-year more than multichannel retailers.
Chris Webster, Capgemini UK head of retail consulting and technology, said: “It is very common for August to see a slight decline in e-retail sales, but it is interesting to see just how much an added impact the Olympics had. It will now be up to retailers to capitalise on the changing season, and make sure the correct strategy is in place as we enter the run up to Christmas.
“Mobile commerce, although slowed slightly last month, continues to grow at a healthy pace. This will be a particularly important channel for retailers this winter, as many more shoppers will be making the most of the developments in mobile technology for their Christmas shopping.”
Tina Spooner, IMRG chief information officer, commented: “While online retail sales saw a boost during July in the run up to the Olympic Games, the same cannot be said during the event itself. The 11% growth recorded in August is below the average Index performance year-to-date and is perhaps an indication that Olympic fever did not have an overall positive impact on the online retail industry.
Mobile shopping continues to increase
“While sales via mobile devices also recorded lower annual growth than seen in recent months, the m-Retail Index also reveals that the average spend via mobile devices was the lowest recorded during 2012. However, sales via mobile devices have grown a staggering 320% year-to-date compared with the same period in 2011 and by the end of this year we expect m-retail to account for around 20% of online sales in the UK.”
Zak Edwards, Prezzybox chief executive, added: “Our sales during August were up 20% on the same month last year, which is great However, times are still tough and the economic climate doesn’t appear to be recovering any time soon, but it really does focus the mind and the direction of the company. Whereas years ago we would do things which were ‘nice to do,’ now everything we do has a cost/benefit analysis attributed to it. If there is no direct or indirect benefit on sales we don’t do it.”
Adam Stewart, Rakuten’s Play.com marketing director, also said the ONS retail figures came as no surprise, as August is traditionally the calm before the Christmas rush. “This is also an exceptional year, with the Olympics capturing the nation’s attention for half the summer it comes as no surprise that shopping was not top of the priority list.”
Stewart concluded: “The summer months are a time for retailers to take stock and start gearing up for the ‘Golden Quarter’ as consumers begin to start thinking about buying gifts for Christmas. Last October saw a rise from September 2011 by 0.6%, according to the ONS, as a result of pre-Christmas sales and promotions and we expect this year to follow a similar pattern.”
