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Internet sales see fastest growth since December

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‘Excellent’ e-commerce sales continued to outstrip high street growth in May, notching up their biggest monthly gain since December.

The British Retail Consortium (BRC)-KPMG Retail Sales Monitor for May 2010 shows a 21.9% expansion in internet, mail order and phone sales in the four weeks from May 2 to 29, compared to May 2009. That compares with growth of 15.9% in April 2010.

Expansion was fast compared to the high street. There, total sales were up by 3%, but like-for-like sales, stripping out the effect of store openings and closures, rose by just 0.8%. The growth, however, is in comparison with a particularly weak month for retail sales in May 2009, when total sales grew by 0.8% and like-for-like fell by 0.8%.

Stephen Roberton, director general of the British Retail Consortium said the news for online, mail order and phone sales was “excellent”. “Customers took advantage of the many online deals and promotions, especially on televisions in the lead-up to the World Cup, as well as clothing and footwear,” he said.

“But we’ve got to put these figures into context: it’s compared with last year’s very weak performance – the lowest growth for at least 18 months.”

Hotspots this May were in food sales. Sunny weather benefitted sales of clothing, footwear, outdoor DIY and leisure. Televisions sold in the run-up to the World Cup, though discounts had to be deployed to help sales. But other big-ticket items sold more slowly, despite promotions, as consumers became more concerned about their financial and professional prospects.

Robertson said: “Consumer confidence has clearly improved since last year’s lows. But there’s still plenty of uncertainty, which is making customers nervous about buying expensive goods, such as furniture, despite widespread reductions. This month’s emergency Budget should provide more clarity.”

Helen Dickinson, head of retail at KPMG, said: “The election campaign didn’t shift consumer spending patterns much either one way or the other but whether the forthcoming Budget will be more damaging remains to be seen and many retailers remain reliant on promotional activity to drive footfall and sales.

“While clothing and footwear overall had a good month, women’s clothing continued to underperform in this sector as a whole. Furniture and floorcoverings was once again the worst-performing sector, highlighting the reluctance of consumers to commit to big-ticket purchases while uncertainty over the future looms.”

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