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Online sales are now the power behind retail sales growth: BRC

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Online sales have come to the fore in the last year. They’ve played a greater role than stores, outside the food category, in growing retail sales, says Helen Dickinson, director general of the British Retail Consortium.

Ecommerce sales contributed 1.4 percentage points to total non-food sales in May. Over the last three months, online sales have represented more than 60% of non-food sales growth. That’s a significant shift from this time last year, when it represented less than 40% – and store sales contributed more than 60% to growth.

“Over the last 12 months online has contributed more to non-food sales growth than bricks and mortar stores, rewarding the substantial investment retailers have piled into new channels in recent years,” said Dickinson.

She was speaking as today’s BRC-KPMG Online Retail Sales Monitor for May 2015 showed ecommerce sales slowed in May compared to the same time last year, according to British Retail Consortium figures out today.

Online sales of non-food products grew by 9.9% in May, slower than the 17% growth achieved at the same time last year, today’s monitor showed. They were also behind the 15.4% growth turned in last month. But they accounted for a greater proportion of total retail sales, at 17.4%, compared to 16.2% in May 2014.

Overall, the BRC-KPMG Retail Sales Monitor for May 2015 found retail sales growth across channels was flat on a like-for-like basis that strips out the effect of store openings and closures. Total sales grew by 1.1% in April. The figure is driven by continuing supermarket wars that have driven food prices down. Over the last three months, like-for-like food sales have fallen by 1.4% while non-food sales grew by 2.1%, leaving like-for-like sales up by 0.5%. Total food sales grew by 0.5%, while non-food sales grew by 2.8%, taking the three month trend to 1.8% growth in total retail sales.

Dickinson pointed to evidence of consumer confidence in May’s figures, shown through strong sales of big ticket items of furniture and domestic appliances. That trend, she said, was particularly strong online. But fashion sales suffered by comparison with a strong performance last year when hot weather spurred sales. Store sales of clothing and footwear showed no growth in at all and online double-digit growth was not enough to compensate, since only a quarter of clothing sales (24.9%) and 28.2% of footwear sales took place online last month. That resulted in an overall fall in sales in these categories.

“At 9.9% May’s online growth is below the twelvemonth average of 11.9%,” said Dickinson. “However it must be kept in mind that May 2014 had one of the strongest online growths of 2014, thanks to record fashion sales, so it is a tough comparison.”

David McCorquodale, head of retail at KPMG , said May’s online growth rate had tapered off compared to April. “However,” he said, “the popularity of online shopping continues to grow with the three-month average growth rate up to 12.5% and online penetration up across all sectors. As investment being made by many retailers in omnichannel systems remains unabated, this reflects the continued importance of this channel for consumer and retailer alike.”

Commenting on the figures, Dan Cohen, regional director at Tradedoubler, said: “The Mobilegeddon phenomenon has dramatically affected online activity. Google’s mobile algorithm has allowed mobile-friendly sites to get a boost in search rankings, while sites with usability issues on mobile devices have significantly dropped in ranking. This, accompanied by the BRC results demonstrates the need for retailers to adopt a multi-channel approach, targeting those consumers who shop on many devices throughout the day. Indeed, recent IMRG results found a growth of 51.9% in mobile retail sales (including tablets), with smartphones accounting for 26% of sales.

“This is especially true of summer. During summer holidays, the convenience of online shopping means shoppers can order at the click of a button while making the most of the good weather, as well as having products delivered at a time that’s convenient for them.”

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