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Online sales growth slides to two year low

The latest figures from the IMRG Capgemini e-Retail Sales Index have revealed that UK shoppers spent a total of £5.4 billion, equivalent to £106 per person, online during February. This represented an increase of 10% on the same time last year, but was half the growth rate seen in February 2011.


Online sales growth slides to two year low

The 10% year-on-year growth of the Index marks the slowest rate reported since January 2010. However, IMRG pointed out that this figure did come off the back of a particularly strong February 2011 and that the slowdown could also be attributable to other factors, such as the gradual phasing out of heavy discounts that were on offer during December and January.

Valentine’s Day helped boost sales in the e-retail sectors traditionally associated with romantic presents, including gifts which grew 26% month-on-month and 22% year-on-year. Similarly, the lingerie and health & beauty sectors saw a year-on-year jump of 27% and 32% respectively. Online sales of alcohol were up 21% in the month.

The clothing sector continued to perform at an unusually low level for the fourth consecutive month, recording just 9% year-on-year growth in February. However, like the wider Index, this was on the back of a very strong February 2011, which recorded a particularly high 34% growth.

Growth in February came from a repeat high performance for online-only/ catalogue retailers, who recorded year-on-year growth of 13%, exceeding the multi-channel/high street retailers who recorded growth of just 8%. This is the second consecutive month that online–only/catalogue has outperformed multi-channel/high street retailers.

Chris Webster, head of retail consulting and technology, Capgemini UK, said: "It is very interesting to see the growth of online-only retailers exceeding that of the multichannel. Low footfall and a disappointing performance on the high street could be affecting the multi-channel retailers’ online counterparts. Online-only retailers’ rapid innovation and adoption of growth areas in e-retail, driven by mobile and click ‘n’ collect, seem to have put them ahead once again; now is the time for the multi-channel retailers to respond."

Tina Spooner, chief information officer at IMRG, added: "Although growth in e-retail sales was lower than expected in February, it has to be considered in the context of the 20% rise seen in February 2011, so double-digit growth is still a positive result.

"It appears evident from the sales growth recorded by online-only/catalogue retailers over recent months that consumer confidence in the online channel is increasing. These results suggest consumers who may have initially looked to trusted high street brands when shopping online for the first time are now becoming more confident in purchasing from pure-play e-retailers. It is also interesting to note that the average e-retail spend for online-only/catalogue retailers is 10% higher than during the same month last year, while for multi-channel/high street it is actually 8% lower."

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