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Online sales growth subdued as high street sales surge ahead

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Online sales showed only subdued growth in March, outperforming high street sales by the smallest margin recorded to date in the British Retail Consortium’s (BRC) monthly retail sales monitor.

Ecommerce grew by 6.6% during the month, the BRC-KPMG monitor found, while retail sales as a whole grew by 3.7% in total, or 1.9% on a like-for-like basis. Last March, retail sales as a whole grew by 3.6% and online sales by 13.9%.

The “good overall” performance of the retail sector wasn’t reflected online, said Helen Dickinson, director general of the BRC . “Fundamentally, online retailing is still strong but in March it outperformed overall retailing by the smallest margin we’ve recorded,” she said.

“The fact that many of us are about and about or spending time with family can have an impact on online sales over Easter, but there may be another factor in play. Increasingly, retail searches that customers start online finish with them buying in stores. This ‘omnichannel’ approach could be one reason behind the narrowing gap.”

However, she predicted, this would almost certainly be a “short lived interlude. I would expect next month’s figures to be more in line with the annual average for this rapidly growing channel to market.”

Meanwhile, the retail sector was affected by snowy, cold weather. While sales of wintry food such as roasts and chocolates received a corresponding boost, spring clothing sales fell.

“2013 has got off to an encouraging start for the market as a whole,” said Dickinson. “Retailers are now hoping for a boost in consumer confidence and the general mood to lift performance across all, not just some sectors, as we head into the second quarter. Getting a bit of sunshine, at long last, might help that along.”

David McCorquodale, head of retail at KPMG , said an early Easter had boosted food, drink and home-related spending. But the three-month average figures were also positive, with total sales up by 3.7% between January and March, with like-for-like sales up by 2.2%. Food sales grew by 4.7% in total, and 2.5%, like-for-like. These added up to “the highest like-for-like sales increases since December 2009,” said McCorquodale. “On the back of strong January and February results this may be the beginning of a positive trend and will be welcomed by many retailers.”

Joanne Denney-Finch, chief executive of grocery analysts the IGD, welcomed the growth in food sales as “cause for optimism.” She said: “Our ShopperVista research shows that 17 percent of shoppers expect to be better off in the year ahead – the highest level we’ve seen since January 2011, when we began tracking this.”

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