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Online sales ‘subdued’ in November: new figures

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Online sales were “subdued” in November, with sales growth of 7.5% leading to the “third worst performance of the year,” according to British Retail Consortium figures out today.

Today’s BRC-KPMG Retail Sales Monitor for November 2012 suggests that while some retailers saw good online sales as a result of voucher promotions, shoppers were looking for lower priced gifts and delaying spending on Christmas. The expected seasonal uplift was only seen in the last week of the month suggesting, said the report, that the US Black Friday tradition of post-Thanksgiving discounts is now “catching on with UK customers.” More traffic was expected to come in the first week of December, however, starting with yesterday’s Cyber Monday.

The highest growth rates in November came from transactions made via smartphones and tablets. But, said Stephen Robertson, director general of the BRC, online buyers had not yet generally recovered momentum lost in an August dominated by sport.

“Despite online buying from smartphones and tablets growing strongly,” said Robertson, “November online sales overall failed to regain momentum lost since the summer. It looks as if consumers were holding off buying because of lack of spare cash and so online sales conversions may have fallen.

“They may also have been waiting in expectation of discounts. A risky strategy for in-demand products but a sign that customers have faith that the ever-shorter delivery times achieved by retailers mean they can order later and still get their goods in time for Christmas.”

Across UK retail sales, like-for-like sales rose by 0.4% in November. Total sales were up by 1.8%, compared to the same time last year when sales were up by 0.7% on November 2010.

David McCorquodale, head of retail at KPMG, said the November was a “wait and see” month. “It appears that consumers know they have to spend before Christmas but are holding off for as long as they can to see if there might be bargains available in the next few weeks,” he said. “Retailers, meanwhile, are trying to hold firm to maintain their margins, but if volumes don’t pick up significantly in the next two weeks, some will bow to the pressure to clear stocks before the year-end and cut their prices.”

The BRC’s Robertson said that November had started well, thanks to end-of-month paydays, half-term and the impact of mid-season sales. However early growth slowed later in the month as people delayed spending, except for buying must-have toys and technology early to avoid disappointment. “Overall,” he said, “the emphasis continued to be on value with consumers looking at lower-priced gifts. The same caution hit online sales, which delivered their third-worst performance of the year.”

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