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Internet shopping growth hits record low in January

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The IMRG Capgemini e-Retail Sales Index recorded the lowest annual growth rates in its history in January.

Like-for-like growth rose by only 5% from January 2009 to January 2010, with UK shoppers spending £4.3 billion online in the month.

Monthly growth fell by 22% from December 2009 to January 2010. This is in line with the usual seasonal trend of sales falling after the Christmas surge, but the decline is greater than in recent years, says IMRG Capgemini. “Retailers enjoyed strong sales in December 2009, managing to hold off on heavy discounting, but the result was weaker annual growth for January”, say the researchers.

“The weaker yearly growth in the UK e-retail market during January follows a strong December when online retailers were clearly well prepared for the festive season, indeed December 26 and 27 saw the highest sales for all of 2009,” explains Tina Spooner, director of information at IMRG. “Less retailer discounting due to well planned stock levels and the increase in VAT equally appear to have had an impact on the online retail sector during January.”

“While annual growth for e-retail was slow in January, we should factor in the fact that December was a very strong month for the industry,” adds Capgemini‘s Chris Webster. “Last January, e-retailers’ sales were buoyed up by heavy discounting and promotions that were necessary to sell stock left over from poor Christmas trading resulting from the impact of the recent move into recession”.

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