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Online sales grow at strongest rate for five years

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Online sales grew by almost a fifth in January as the sector turned in its strongest start-of-year performance for five years, according to British Retail Consortium (BRC) figures.

Today’s KPMG-BRC Online Retail Sales Monitor found that non-food sales grew by 19.2% last month, the strongest showing since January 2009. Last January, they grew by 13.5%. Online sales also contributed 1.2% growth to total non-food sales during the month, and represented 17.4% of total non-food sales.

Meanwhile, retail as a whole enjoyed its strongest growth since March 2010, with total sales up by 5.4% in January, compared to the same time last year, and like-for-like sales up by 3.9%.

Helen Dickinson, director general of the BRC , said the figures demonstrated the increasing importance of online in the retail sales mix. “Embracing omnichannel sales has been a big driver of business for UK retailers,” she said. “We’ve seen an ever-more discerning customer taking good advantage of click and collect and other innovative services. The combination of an online presence with a bricks and mortar offering is becoming increasingly compelling.

“There’s no doubt that online is driving structural change within the sector and retailers will continue to invest heavily to provide the seamless experience between channels that today’s shoppers demand. Our figures showed that 17.4% of all non-food spending is online and we’re expecting this number to continue to rise as operations become more efficient, collections more convenient, deliveries faster, and technology more integrated.”

David McCorquodale, head of retail at KPMG , said: “With growth at 19% and penetrations from online sales running at 17%, this channel is much more than the new frontier for retailers and really is the growth engine for the sector. Many retailers are investing heavily in analytics and supply chain fulfilment to drive personalisation of offer to the consumer and differentiate themselves from competitors through delivery performance. As online growth drives about a third of non-food sales expansion, retailers are doing all they can to fully embrace the growth prospects offered.”

However, food sales showed slower growth, with total sales up by 0.8% and like-for-like sales down by 1.2%. “Rising expectations for the economy weren’t reflected in food sales and this was partly to do with the wettest January on record. A slowdown in food price inflation has affected these figures and it seems shoppers have noticed. A quarter now expect food prices to stay steady or decline slightly over the next 12 months, up from 14% who predicted this a year ago.”

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