Online sales growth slowed in January as shoppers ‘returned to reality’

Shoppers ‘returned to reality’ in January, a month in which online sales grew by only 11.3% compared to the same month last year, according to the latest figures from the British Retail Consortium (BRC).

The figure, published in today’s BRC-KPMG Retail Sales Monitor for January 2012, comes after a strong December in which internet sales grew by 18.5% over Christmas. In January, however, consumers tightened their belts, both online and offline. Overall retail sales grew by 2.1%, compared to last January, but the telling like-for-like sales figure was down by 0.3% compared to last year. But on both measures, said the report, this was the “the second-worst January, after January 2010, since the survey began in 1995.”

Stephen Robertson, director-general of the BRC, said: “January has marked a return to reality for shoppers and for retailing in all its forms. Non-food, non-store retailing strengthened in the run-up to Christmas but these figures show consumers have reined in their spending since and business has returned to much closer to the 12 month average.

“The underlying factors which are affecting overall retail spending are also taking their toll online. Sales are being driven by high levels of discounting as cautious customers try to balance their budgets.

“Massive growth in online retail searches is not translating into the same rate of sales growth, showing people are shopping around and making careful decisions about what to buy.”

Across UK retail, food sales slowed after Christmas, while non-food sales were driven by heavy discounting in clearance sales.

Helen Dickinson, head of retail at KPMG, said: “After a strong than expected December these latest figures are rather sobering. The return to negative like-for-like sales reflects the trend seen throughout most of 2011 and is a stark reminder of the challenges facing retailers.”

Joanne Denney-Finch, of grocery analysts the IGD, said: “Consumes are adapting to the era of austerity by being more proactive about securing the best deals. Our research shows that seven in 10 shoppers now rate promotions as very important when choosing what stores to shop in.”