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Online sales growth slowed in January: BRC

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Online sales appear to have slowed in January, according to new analysis from the British Retail Consortium.

The BRC-KPMG Online Retail Sales Monitor for January 2017 found that online sales of non-food products grew by 8% in January. That’s a contrast to the previous January when they rose by 14.9%, and is above the 12 month average of 9.5% growth. The slowdown came as overall retail slowed. In the three months to January online sales of non-food products grew by 8.6%, year-on-year, while total non-food sales in the UK were up by 0.3%.

Some 22.9% of retail spending on non-food products took place online in January, up from 21.6% a year earlier. In the three months to January 24.9% of retail sales took place online, while online sales contributed 2.9 percentage points to the year-on-year growth of total non-food sales. But at the same time, in-store sales made a negative contribution of -2.6 percentage points, while falling by 2.2% in total, or 2.4% on a like-for-like basis that strips out the effect of store openings and closures.

Helen Dickinson, chief executive of the BRC said: “Online channels achieved the highest share of total non-food retail spend on record in the three months to January, despite the 8% growth being somewhat below the trend of late. In fact, the rolling twelve-month average growth to January 2017 is the lowest since the monitor began in 2012, falling below double-digits for the first time.

“As with total sales, online sales in January were set against a strong comparative period, as January 2016 recorded the highest growth of last year. However, with £1 in every £4 of non-food spending being spent online consistently over the last three months, this provided enough momentum to largely shield online growth from the slowdown of non-food sales overall. It was stores that bore the brunt of the slowdown; posting their deepest three-month decline on record as the demand during retailers’ clearance sales was predominantly online.

“As the clearance events came to an end, full price items didn’t attract the same demand, echoing a sense of caution from consumers and ultimately resulting in a quiet end to the month for many retailers.”

Paul Martin, UK Head of Retail, KPMG, said: “Unlike the chilly high street, online retail sales continued to grow in January, with non-food online sales up eight per cent compared to last year. The month’s cold snap is likely to have encouraged high street hibernation, with shoppers preferring to browse from the comfort of their own homes.

“Indeed, consumer focus really did turn indoors during the month, with sales of furniture and other household items performing particularly well. Footwear sales on the other hand continued to struggle and infrequently made it to e-checkouts.

“Online retail channels will continue to grow in popularity, and with increased pricing pinching the consumer purse, retailers will need to balance price, personalisation and customer experience seamlessly in order to grab the attention of their customers.”

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