Industry

Online sales grow slowly in February, while in-store sales decline: BRC

Online sales grew slowly last month while in-store sales fell, new British Retail Consortium (BRC) figures show.

That helped overall retail sales to grow by 0.4%, in total, although like-for-like sales, which strip out the effect of store openings and closures, were down by 0.4%.

Ecommerce sales of non-food products grew by 8% in February, compared to the previous year, and in-store sales fell by 2.4% in total, or 2.6% on a like-for-like basis, which strips out the effect of store openings and closures, according to the BRC-KPMG Online Sales Retail Sales Monitor for the month. Over the three months to February, online sales of non-food products in the UK grew 7.7% year-on-year. That’s the lowest average, says the BRC, since its monitor began. Over the same period, total non-food sales in the UK fell by 0.2%, the first decline since November 2011.

Some 22.2% of non-food sales took place online in February, up from 21% last February – while the three-month average stands at 23.2%.

Helen Dickinson, chief executive of the BRC [IRDX VBRC], said: “A fairly stable rate of online growth has again helped compensate for declines in stores. The online market has now grown to over 20% of total non-food sales, and as a result growth of 8% is understandable if not as impressive in previous years and helps explain the lowest three-month average rate of year-on-year growth since May 2013.

“Digital platforms remain the preference for a savvy shopper to search for the items they want at the best price, and helps explain why clothing and electronics have driven online growth when sales in stores have flagged. A later Mother’s Day this year has distorted the figures for February, since purchases which were made in the final week of February last year will now fall in March’s figures this year. We expect March’s growth to be stronger due to the impact of this distortion and of new video game releases.”

Over the the three months to February, online sales contributed 2.3 percentage points to the year-on-year growth of total non-food sales. In contrast, in-store sales made a contribution of -2.5 percentage points over the same period. In February alone, online sales contributed 1.8 percentage points to non-food growth.

Paul Martin, UK head of retail at KPMG [IRDX VKPM], said the growth in online sales contrasted with poor high street performance.

“Interestingly, many of the categories that failed to capture the attention of shoppers in store, did so online – including clothing and footwear,” he said. “Carefully placed promotions and the shorter wait until pay day in February are likely to have nudged online shoppers to e-checkouts.

“School half-term will also have contributed to online retailer’s stronger performance and notably children’s toys performed particularly well during the month.

“In the run up to the Budget, online retailers will be eager to learn if the Chancellor looks to support the retail sector. The business rate rise has been hotly contested, given the varying impact the proposed changes will have on retailers utilising physical or online retail channels.”

Mentioned in this piece…

British Retail Consortium

British Retail Consortium

IRDX: VBRC

The British Retail Consortium (BRC) is the lead trade association representing the whole range of retailers, from the large multiples and department stores through to independents, selling a wide selection of products through centre of town, out of town, rural and virtual stores. (more…)

KPMG

KPMG

IRDX: VKPM

KPMG in the UK has over 10,000 partners and staff working in 22 offices and is part of a strong global network of member firms. Our vision is simple – to turn knowledge into value for the benefit of our clients, people and our capital markets. Our innovative spirit inspires what we do and how we do it, providing valuable benefits for clients, employees and stakeholders. Constantly striving to be better lies at the heart of what makes us different. (more…)

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