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Another poor August for online sales as Olympics win shoppers’ attention

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Online sales of non-food products in the UK grew by just 6.2% in August versus a year earlier, the slowest increase since March 2013 as shoppers were distracted by the Olympics, says the latest figures from BRC-KPMG’s Online Retail Sales Monitor.

To put the decline into perspective, in the three months to August, online sales of non-food products in the UK grew 8.8% year-on-year. Over the same period, Store sales fell, posting declines of 1.7% on a total basis and 1.9% on a like-for-like basis

However, it could just be a blip: August has form. August 2015 saw growth of 6.5% only. The 12-month average for Online sales remains at 11.1%

And, in August 2016, Online sales represented 20.2% of total Non-Food sales in the UK, against 19.1% in August 2015. This is the eighth consecutive months that the Non-Food online penetration rate has remained above 20%

Helen Dickinson OBE, Chief Executive, British Retail Consortium (BRC) explains: “Online echoed the performance of total sales this month, with growth slowing to just 6.2%, well below the 12-month average of 11.1%. People’s attention on screens turned to watching the Olympics rather than browsing, resulting in the lowest growth for online non-food sales since March 2013.”

She continues: “Online as a proportion of total non-food retail sales remains above 20%, contributing positively to total non-food sales growth, while store sales registered a decline. Today’s figures are a reflection of a month of lower sales growth across the board as people focussed their energies on outdoor leisure activities rather than shopping.

“The fact that online continues to be the key driver of sales growth is both testament to and a driver of innovation in the industry. Despite continuing uncertainty and swings in consumer confidence since the referendum retailers continue to invest in optimising their digital platforms, which have already become an integral part of the customer journey.”

David McCorquodale, Head of Retail, KPMG adds: “While online sales were a more positive affair than the high street overall, e-channels experienced the slowest growth so far this year with non-food online sales up just 6.2% in the month.

“Health and beauty was the standout category as consumers stocked up on sun cream ready for exotic holidays abroad and Britain’s very own August scorcher. The warmer weather also encouraged parents to order outdoor toys online, helping to keep the kids out of mischief during the school summer break.

“In contrast, women’s footwear experienced negative growth in the month with shoppers reluctant to consider new Autumn collections in the summer heat. No doubt the category will improve as the weather cools in the coming months. With the summer holidays now coming to an end, ‘back to school’ marks the next opportunity for online retailers to grab the attention of shoppers.”

Commenting on the figures, Richard Lim, Chief Executive, Retail Economics adds: “These latest figures from the BRC show that shoppers reined in spending despite a strong bounce back in consumer confidence. On the whole, consumers react to their personal experience of the economy in terms of their job security, rising prices in the shops and what happens to their wages. As of yet, not much has happened to affect spending power and so, judging by this latest data, their propensity to spend could be faltering. Shoppers are still coming to terms with what Brexit will mean for their personal finances and it’s this heightened uncertainty that will lead to volatility in the short-run.”

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