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Determined start to 2012 for online retailers

Latest figures from the IMRG Capgemini e-Retail Sales Index reveal that shoppers in the UK spent a total of £6bn online during January, equivalent to £118 per person, reflecting a year-on-year growth of 16%.


Determined start to 2012 for online retailers

When compared with the high-street and wider retail sector, the continued resilience of e-retail in the face of economic uncertainty is clear. The British Retail Consortium reported a disappointing start to the year, with the traditional ‘bricks and mortar’ retailers indicating a year-on-year growth of just 2.1%.

This poor result comes on the back of a continued decline in inflation, which suggests more needs to be done to reinvigorate consumer spending on Britain’s high-street.

Travel sales bounced back in January, following five consecutive months of decline, with sales soaring 205% on December.  For the first time since the sector was first tracked in December 2008, the average spend on travel has exceeded £1,000, which suggests that while the majority of Brits are finding their finances squeezed, the more affluent shopper is able to splash out on luxurious holidays.

Outside of travel, January saw a steep decline on December, with alcohol reporting a drop of 66% - a result, no doubt, of Brits looking to detox after Christmas. The clothing sector saw a monthly decline of 38% and while a drop in January across all sectors is typical, sales of clothing have recorded low levels of year-on-year growth for the third consecutive month, likely to be a result of the relatively mild winter.

Tina Spooner, Chief Information Officer at IMRG, commented, “The January results reveal a solid start to the year for online retailers and there are several interesting factors we see from these figures. The first is the average travel spend exceeding £1,000 for the first time as, while many consumers look to curtail their expenditure on luxuries, the more affluent consumers can still look to treat themselves with an expensive holiday. The second factor is the lack of a small spike in spending in late December / early January, usually influenced by the post-Christmas sales initiatives. This could be due to the fact that heavily discounted products have been consistently available for months, so the introduction of a new sales period would have had less impact.

“Thirdly, there may be an emerging trend in the sales of clothing. In recent years, this sector has recorded average growth of over 20% but year-on-year growth has slowed considerably in recent months, recording average growth of just 11% between November 2011 and January 2012.”

Chris Webster, head of retail consulting and technology at Capgemini said, “There’s little cheer in these results for retailers. While the consumer price inflation is steadily decreasing, it has thus far failed to reinvigorate consumer spending. The steady march of customers moving from the high street to online channels continues and if anything, accelerates as savvy shoppers look to make their wages stretch further.”

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