Close this search box.

Mixed messages on online sales

This is an archived article - we have removed images and other assets but have left the text unchanged for your reference

Online sales showed their weakest growth for 18 months last month, as summer travel sales slowed, according to new figures from the IMRG. The slowdown followed a first-half of the year in which sales were up by 21%.

The IMRG/Capgemini eRetail Sales Index for July showed ecommerce sales up by 11.5% in July, the lowest growth figure for year-on-year growth since January 2010. In all, a total of £5.58bn was spent online last month, 5% up on the previous month.

However, the findings contrast with retail sales figures for July released this week by the Office for National Statistics (ONS), which found strong growth in online sales. Across the whole of retail, it reported a 4.3% increase in the value of retail sales in July 2011, compared with July 2010, with the volume of goods sold unchanged on last year. It estimated some £26bn was spent on retail goods in July 2011, up from £24.9bn the previous year, and up by 0.8% on the previous month.

Taking online sales alone, the ONS figures found that the average weekly value of internet retail sales in July was £523.4m – about 9.1% of total retail sales, excluding automotive fuel. That’s a rise of some 32% from last July’s £395.8m, when internet sales accounted for some 7.1% of total retail sales.

Travel bookings fell by 1%, year-on-year, according to the IMRG figues, but since such bookings are relatively high value this had a bigger impact on total sales. When year-on-year growth for July was calculated without including travel sales, growth came in at 18% rather than 11.5%.

Electricals sales were also down on the previous year, by 3%. Menswear and womenwear sales were flat, compared to the previous year.

All the other sectors reported growing year-on-year sales. The strongest rise was in home and garden, up by 27% against a slow July 2010. Clothing, footwear and accessories as a category saw sales up by 25%, while accessories alone saw a 30% sales boost.

Chris Webster, head of retail consulting and technology at Capgemini, said online had seen such a successful first half of the year, it was a “tall order” that would be maintained in the second half. “The slowdown in July shows the internet is not immune in tough times. Successful retailers will need to expand into multichannel and continue to improve customer experience throughout the online shopping processes.”

IMRG chief information officer Tina Spooner said: “While the index performed ahead of expectation during the first six months of the year, a slowdown in eretail growth during the second half was always going to be a possibility.

“Between July and December last year the index recorded strong growth, with sales up 21% year-on-year, and therefore over the coming months sales may well be slower, having come from a stronger base last year. However, online retail continues to consistently deliver double-digit growth, despite the retail gloom on the high street.”

Russ Carroll, UK managing director of price comparison site, said: “Home and garden sales showed strong growth in July suggesting people were spending more time at home, perhaps forgoing a foreign holiday in the difficult financial climate. Clothing also showed strong growth as more and more consumers turn online to find the best fashion deals.”

Simon Walker, director of product management at strategic information management company Stibo Systems, said: “What we are seeing on the high street is being reflected online, with online sales winding down to the lowest rate for 18 months. Retailers need to consider strengthening their mobile strategies.”

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on