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Internet sales surged in May, but supermarket ‘price war’ held back high street: BRC

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Internet retailing surged in May, but on the high streets a supermarket price war held back sales, according to new figures.

Online sales of non-food products grew by 17% during the month when they accounted for 18.7% of all UK retail sales, according to the latest British Retail Consortium’s latest Online Retail Sales Monitor. A year earlier, sales in May 2013 grew by 9.9%.

The fast growth came against a background of more subdued high street spending, the accompanying BRC KPMG Retail Sales Monitor showed. Total UK retail sales grew by 2% in May, compared to the previous year, while like-for-like sales were up by only 0.5%. The figures, suggested David McCorquodale, head of retail at KPMG, reflected the supermarkets’ “race to the bottom,” as they maintain volumes through price cuts. “This price war,” he said, “is hindering the retail sector’s overall recovery, which without the effects of these cuts would have seen like-for-like sales outpace inflation over the last quarter.”

Online, the clothing and footwear categories showed particularly high growth, respectively turning in their strongest performance since Christmas and December 2012. Helen Dickinson, director general of the BRC , said broader ranges also underpinned online growth.

“Britain’s fashion retailers are leading the way in developing their digital offering for discerning customers and that is really paying off in resulting sales figures,” she said.

“This month sees the highest growth in online sales of clothing for five months and the proportion of purchases we are making online has grown several percentage points in a year. This also represents the highest penetration ever recorded for clothing since the inception of the online monitor. Footwear is telling a similar story where great websites and good online service have led to the second-highest proportion of footwear sales online ever recorded by our monitor.

“The overall strong performance is underpinned by the broadening of the ranges available online, from game consoles to garden furniture.” She said sales of World Cup-themed products were also starting “across all gender and age groups.”

KPMG’s McCorquodale said the rise of online gave retailers the opportunity of ”unbridled insight” into consumer behaviour, and that it was “vital” to use that information in their strategies. “Online sales surged ahead in May, driving a third of non-food sales growth for retailers over the quarter and underscoring the importance of having a strong multichannel business” he said. “As the shift to online slowly continues, retailers must invest in analysing the data they are gathering about their online customers and use this to improve their total proposition.”

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