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Online growth slows as UK retail sales hit low point

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Growth in online sales slowed down significantly in March as UK retail saw its biggest monthly decline for at least 16 years, according to the latest data from the British Retail Consortium (BRC),

The BRC-KPMG Retail Sales Monitor for March, out today, showed that non-store, non-food sales, a category made up of internet, mail order and phone sales, grew by just 7.5% in March, compared to the same time last year.

That’s well ahead of the 1.9% decline recorded by total retail sales, the worst fall since since the monitor started in 1995. But it’s also the weakest performance yet recorded for online sales since they started being recorded in the BRC monitor, in October 2008.

Online sales were also down compared to the 10.4% growth recorded in the previous month, February.

Stephen Robertson, director general of the BRC, said sales in this area were “still up on a year ago, but the rate of growth continued the downward trend that began at the start of this year.”

He added: “The steady underlying development of online retailing goes on but it’s not immune from the widespread customer concerns that are knocking retailing as a whole.

“Regardless of the retail channel, falling disposable incomes and the fear of worse to come mean people don’t want to spend. There’s only so much discounts and promotions can do to overcome that.”

Commenting on the total fall in UK retail sales, he said: “Mounting fuel and utility costs, falling house prices, higher VAT and the prospect of more tax rises and job losses left people unwilling to spend unless they really had to. These pressures aren’t going away.”

Helen Dickinson, head of retail at KPMG, said: “We have seen an emergence of new, lower spending patterns since the middle of January, which are currently continuing to trend downwards. Many retailers will not be able to sustain this ongoing weakness in demand beyond the short term and are hoping for some good news.”

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