Click here
Click here
Retail Technology, Retail technology News

Online shopping growth slumps to record low in January

Tuesday February 23 2010

Although the latest January 2010 sales figures show consumers spent £4.3 billion online, sales fell by 22% compared to December 2009

Although the latest January 2010 sales figures show consumers spent £4.3 billion online, sales fell by 22% compared to December 2009


The IMRG Capgemini e-Retail Sales Index has recorded the lowest annual growth rates in the history of the index.


Like-for-like growth rose by only 5% from January 2009 to January 2010, with UK shoppers spending £4.3 billion online in the month. Retailers enjoyed strong sales in December 2009, managing to hold off on heavy discounting, but the result was weaker annual growth for January.


Monthly growth fell by 22% from December 2009 to January 2010. This was in line with the usual seasonal trend of sales falling after the Christmas surge, but the decline was greater than in recent years.


Festive rush dampens New Year spirit


Chris Webster, Capgemini retail consulting and technology vice president, said:

“While annual growth for e-retail was slow in January, we should factor in the fact that December was a very strong month for the industry. Last January, e-retailers’ sales were buoyed up by heavy discounting and promotions that were necessary to sell stock left over from poor Christmas trading resulting from the impact of the recent move into recession.”


Tina Spooner, IMRG director of information, said: “The weaker yearly growth in the UK e-retail market during January follows a strong December when online retailers were clearly well prepared for the festive season, indeed 26 and 27 December saw the highest sales for all of 2009. Less retailer discounting due to well planned stock levels and the increase in VAT equally appear to have had an impact on the online retail sector during January.”


Multichannel suffers worse than pureplay


Both the e-retail Index for multichannel and online only retailers fell compared to the previous month, however multichannel retailers’ online sales fell at twice the rate (27%) of pureplay retailers’ sales (14%). This reflected the fact that multichannel retailers have an advantage in the run up to Christmas by having a physical High Street presence, but that this falls away post-Christmas, when consumers are not so concerned by last-minute deliveries, said IMRG.


Bruce Fair, Kelkoo UK managing director and IMRG member, commented: "Despite a significant slowdown in January, we are still predicting solid growth in the e-retail sector this year, with the market expected to grow by 12% by the end of 2010. Consumers know they can get better value, more choice and a more convenient shopping experience online. By the end of the year, online shopping will account for £1 in every £10 spent in the retail sector and the average online shopper will spend upwards of £1,100 online.”