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Online sales grew in January, as UK retail sales fell

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Online sales grew in January, against a background of falling overall retail sales as snow hit the country, new figures suggest.

The Office for National Statistics’ Retail Sales figures for January show that the volume of goods bought last month fell by 0.6%, while the value of those goods stayed flat. However online sales rose by 8.7%, to an average weekly spend of £546.5m. Some 10.1% of all retail spending, excluding automotive fuel, took place online.

Some sectors saw faster growth, though from a lower base. According to the ONS figures, the proportion of food sales made online rose by 27.1% to 3.7% of all food sales. That is, said the ONS, “the highest on record.”

Faster online growth was shown by the IMRG Capgemini eRetail Sales Index, which showed that the online sales up 16% year-on-year in January. Some £6.9bn was spent online in January, nearly £1bn more than January 2012. The clothing sector saw a 23% boost to online sales, compared to the previous year, while travel sales were up by 7%.

Mobile sales rose by 193% in the month. That’s slower than the trend over last year: sales grew by 304% through 2012 compared to 2011.

“The growth of mobile sales may be showing signs of slowing, but it is coming from a very high base and 193% is still very strong,” said Tina Spooner, chief information officer at IMRG. “What is apparent is that consumers are becoming more confident in purchasing through mobile devices, as the experience on mobile sites improves. The conversion rate has doubled in the space of a year, rising from 1.3% in January 2012 to 2.6% in January 2013.”

Chris Webster, VP of consumer products and retail at Capgemini, said: “More of us are seeing our smartphones and tablets as the smarter choice for shopping, with the proportion of direct purchases from mobile devices doubling in the space of a year.

“Growth may be slowing as mobile shopping becomes ubiquitous, but don’t mistake this for a decline. Mobile commerce is here to stay. We’re no longer just seeing consumers shopping from their sofas at home, but instead spotting products in store and choosing to instead purchase online on the grounds of cost or convenience.”

IMRG and Capgemini are now forecasting that online sales will grow by 12% in 2013.

The ONS estimates its figures after surveying 5,000 retailers of all sizes. The IMRG Capgemini figures track online sales figures from more than 100 retailers who sell online.

Commenting on the ONS figures, John Ibbotson, director of the retail consultancy Retail Vision, said: “With many high streets frozen solid in January, the dash to online became a sprint. The icy weather accelerated an already relentless trend. Online now accounts for more than 10% of all non-fuel retail spending – and that figure is likely to reach 25% by 2016.

“Large retailers have learnt to use online as a hedge against bad weather, and the multichannel champions like Tesco and Currys go from strength to strength.

“But snow or no snow, online shopping has an irresistible economic logic. People will always be drawn to the web’s consistently lower prices.

“Trusted brands like John Lewis are able to capitalise on this better than anyone else, as the combined perception of online value from a reliable high street name is all but unbeatable in shoppers’ minds.”

And Glenn Uniacke, head of options at the foreign exchange specialists Moneycorp, said: “Quite frankly the figures are a train wreck. At a stroke they have halted the retail sector’s slow but steady growth.

“To be fair, the expectations had crept up to improbable levels. The snow was always going to be a major drag factor – and so it proved. What sluggish growth there was simply froze up as people were unable to get to the shops.

“While the snow effect was a one-off, such disappointing figures have nudged the UK closer to a triple dip recession.

“Sterling has taken a knock as a result – within minutes of the data coming out, it had lost almost a cent against the dollar and half a cent against the euro.

“The capacity for growth is there, but for now it is just that – capacity rather than the real thing. And as long as that continues, sterling will continue to wobble.”

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