November e-commerce sales lower than forecast but growth builds on gains last year

November e-commerce sales lower than forecast but growth builds on gains last year

The November IMRG Capgemini e-Retail Sales Index has revealed lower-than-expected performance as the economic crisis continues to impact upon consumer confidence.

Despite the fact sales did not deliver on the Index forecast, £7.1 billion was spent online in November - the first time the £7bn-mark broken has been broken in a single month.

The Index was up 11% on November 2010, just below internet trade body IMRG and Capgemini’s forecast of 12-14% growth for the fourth quarter, but building on a very strong performance last year, up 22% on the month last year.

Consumers tighten their belts

The benchmark attributed this dip in online sales growth to wider retail trends. According to the British Retail Consortium, November saw the High Street suffer its biggest annual fall in sales since May this year.

The clothing was hit especially hard, recording just 8% year-on-year growth - the lowest growth figure for the period since May 2009 and in stark contrast with the 34% growth reported in November last year.

With online sales down 20% on October, the travel sector was hit the hardest, continuing its decline throughout the year. Other sectors reporting disappointing sales include alcohol, which reported year-on-year growth of just 2%.

Bargain hunters still busy

There was more positive news for the electrical sector. Having performed badly throughout 2011, it saw an unexpected return to form, reporting 14% year-on-year growth and a massive 47% jump in sales this October.

Health and beauty also enjoyed a solid month, jumping 30% compared to the same month last year and increasing a significant 63% on October.

Chris Webster, head of retail consulting and technology at Capgemini says: “While these lower than expected growth figures show that online is not immune to the economic slowdown, the shift from the high-street to online continues.

"A growth of just 11% is very disappointing for this time of year as traditionally shoppers start their Christmas shopping early to spread the cost of presents over several pay cheques. This does follow a particularly busy November last year, but nevertheless it is clearly a sign of consumers tightening their belts.”