February 2009 saw a 13% increase in online sales compared with February 2008, the latest IMRG Capgemini e-Retail Sales Index has found, down from January’s 19% year-on-year increase and down 11% on January’s sales.
The Index reveals that there is variation in the growth of individual sectors:
- After a decline in January, sales in beers, wines and spirits were 30% higher in February than January and 10% up on a year ago.
- Clothing, footwear and accessories were down 6% on January but up 21% on a year ago.
- Electricals were down 9% on January but up 28% on a year ago.
- Gifts, perhaps fuelled by Valentine’s Day, were up 24% on January but down 37% on a year ago.
- Health and Beauty were down 5% of January, but up 11% on a year ago.
- Lingerie was up 10% but down 14% on a year ago.
“These results show that the strong post-Christmas sales push and a toughening retail market have indeed led to a drop in spending from January to February”, says Mike Petevinos, head of consulting for retail for Capgemini UK. “However, year on year growth for e-retail continues in stark contrast to the high street. Consumers are still turning to the internet to make their purchase decisions and ensure their disposable income goes further.”
And IMRG’s Tina Spooner concluded that “despite the uncertain economic climate, the e-retail market continues to grow and shows resilience during the recession. With high street sales remaining flat in February, it is evident that consumers are using the web as a means to making the most of their shrinking disposable income.”
“Recent research found that 87% of UK consumers are making changes to their spending patterns, with many preferring to plan purchases and avoid impulse buying,” she added. “Internet shopping allows consumers to achieve these goals, while at the same time offering the convenience, choice and competitive pricing that shoppers demand.”
Individual retailers have also seen marked variations in their sales:
- Rowan Gormley, founder of Naked Wines, says that “February was a really good month for us, overall 24% up on plan”.
- Paul Farquhar, company spokesman for The Health Supermarket, said: “Although sales are holding up and quite buoyant, we are finding that some of our suppliers are running their stocks down to much lower levels due to cashflow issues (caused by the recession). This has a knock-on effect in our supplies and we are now having to increase our stockholding considerably to allow for this fact”.
- Alison Wade, head of marketing at Buyagift.com , said: “Buyagift.com has proved at the beginning of this year that there is still a healthy and stable platform for online gifts retailers in the current economic doom and gloom. With profits up 10% on last years’ figures for February and a very strong end to 2008 finishing 24% up year on year from 2007, business is looking good. This ongoing growth amidst particularly torrid conditions could be attributed to various factors. Despite consumers curbing their spending habits as a whole, escapism is still in demand and the opportunity to drive fantasy cars or pamper oneself in a top spa for a day, will still hold massive appeal, especially when times are bleak.”
- Giles Harridge, co-founder of Gettingpersonal.co.uk, said: “Even with one less selling day in February this year, the full month’s sales were up 85% compared to 2008. The period up to Valentine’s Day saw a spike of 114% year on year sales. The growth continued throughout the rest of the month, running at a rate of 47%. The Monday before Valentine’s saw visitor numbers and sales comparable with our top selling days during the Christmas peak. This is consistent with the recent confirmation by Hitwise that gettingpersonal.co.uk was named a Top 10 Website 2008 in Gifts and Flowers Category for 2008.”