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June sees online sales growth

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Retail sales rose both online and offline in June, according to two sets of figures out today.

Ecommerce sales rose by 15.9% in value, to account for 16.2% of all retail spending, according to official figures from the Office for National Statistics, while the IMRG-Capgemini eRetail Sales Index put online sales growth at 9.5% for June – the second lowest growth rate for the month since 2001.

The ONS’s Retail Sales report for June 2017 suggested offline sales also grew strongly, with total retail sales, which primarily take place in shops, up by 5.7% in value in June, and by 1.6% over the last three months.

Kate Davies, Office for National Statistics senior statistician said: “Today’s retail sales figures show overall growth. A particularly warm June seems to have prompted strong sales in clothing, which has compensated for a decline in food and fuel sales for the month.

“Looking at the quarterly data, the underlying trend as suggested by the three-month on three-month movement is one of growth, following a fall in quarter one, suggesting a relatively flat first half of 2017.”

The IMRG said warm weather encouraged people out onto the high street, rather than shopping online. It pointed to slowing growth for online-only retailers (+11.7%, contrasting with +31.4% last year), but steady growth for multichannel retailers (+8%, the same as last year). This may be because more visitors went to retail parks (+2.3%) during the month, according to the BRC-Springboard Footfall and Vacancies tracker out earlier this week, which showed overall footfall up by 0.8% for the month. Growth in visits to retail parks has previously been linked to the use of click and collect services, since they tend to have easier parking.

IMRG also said that Amazon’s Prime Day event may have suppressed spending in June as people saved for July discounts. That may be evidenced by figures showing falling sales of electricals (-13.9%), gifts (-8/2%) and accessories (-1.4%).

IMRG managing director Justin Opie said: “Online retailers are facing something of a perfect storm at the moment, having to operate against the backdrop of a continuing wave of political uncertainty, rising inflation, a changing retail calendar (due to impact of major sales days such as Prime Day) and heatwaves. The low growth online during election week (+3.4%) strongly suggests that the election did exert some influence over shopping behaviour as did, arguably, the weather – albeit in a much more ‘omnichannel’ sense. Sales growth for online-only retailers was down almost 200% year-on-year, while for multichannel retailers growth held at the same rate as last year – quite possibly buoyed by the appeal of click and collect orders to provide a bit of certainty for their trips to the high street.”

Bhavesh Unadkat, principal consultant in retail customer engagement at Capgemini , said: “Despite a relatively flat June overall, the month saw some significant sector specific movements in both directions. Summer sun and celebrations drove beers, wines and spirits to its highest June year-on-year (YOY) growth since 2014. On the other side of the coin, accessories saw its first ever YOY decline since we began tracking it in 2008 – To give you some perspective, its average YOY growth is 48%. This is potentially caused by a fall in consumer confidence given current political and economic challenges, driving down spending on luxuries. Other worthy mentions include electricals, which has had the first June decline since 2003, likely to be caused by the ‘Amazon Prime effect’. In short, a month of ups-and-downs leading to an overall pretty weak June.”

ONS figures suggested strong growth in department store online sales – up by 15.6% to account for 14% of all retail sales in this category, while textile, clothing and footwear internet sales rose by 14.8%, making up 14.5% of all sales in this category. Ecommerce sales of household goods sales were up by 8.4%, accounting for 10.4% of all retail sales, and food sales were up by 4.1% to account for 4.9%.

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