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UK online sales show 13% annual rise

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UK online shoppers spent £4.4bn in April, according to today's IMRG Capgemini e-Retail Sales Index. But while online sales were up by 13% year on year, they were down by 3% compared to the previous month. The Icelandic volcano’s impact on the travel industry was among the factors behind the drop.

Online travel sales were up by 5%, year on year, but down by 9% compared to March. This, said Tina Spooner, director of information at IMRG, “may be an early indication of the impact of the volcanic ash cloud on the travel industry.” Online travel sales had shown double-digit growth in the earlier months of this year.

Bruce Fair, managing director of Kelkoo UK, said: “The recession cost the UK travel industry £3.7bn in 2009 and it looks like the sector will need to buckle its seat belt for another bumpy ride in 2010. Just as forecasts were indicating a modest financial recovery, with sales set to increase by 2.4% (£1bn) this year, the Icelandic eruption threatens to throw cinders on the travel industry’s recovery.”

David Stratton, head of sales at HolidayExtras.com, added: “HolidayExtras.com has taken a hit since the volcanic ash disrupted UK air space; at the height of the chaos we were receiving cancellations at a rate of 1,000 per day. Our immediate concern was to help our customers and our partners' customers - many of which were stranded thousands of miles away, and we believe this dedication to customer service will lead to these customers returning to book again with HolidayExtras.com and assist long-term growth.”

But, says IMRG, sales were also down in April compared to March because retailers did well over Mothers’ Day on March 14.

The area of greatest growth in online retail sales was in homes and gardens. Here sales rose by 32% compared to the previous year, as shoppers got their homes and gardens ready for summer. This was also one of only two categories to show growth compared to the previous month, with sales up by 11% compared to March.

The other strong growth category was clothing, footwear and accessories, up by 21% in April, compared to last year and up by 1% compared to March.

Chris Webster, vice president, retail consulting and technology, at Capgemini, said: “Online retail is seeing continued high growth levels of 13% as more and more retailers are using an online channel to attract a new market and retain existing customers. The clothing sector in particular has been given a boost by April’s early signs of summer, with shoppers logging on to update their wardrobes for the new season. This sector is driving growth behind the industry as a whole.”

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