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Retail sales grew online in October but dipped across all retail channels

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Online sales grew in October but declined slightly across all channels compared to last month, official figures suggest. 

Online sales grew by 8.8% in October compared to the same month last year, according to the Retail Sales report for October 2019 from the Office for National Statistics (ONS), while sales rose by an estimated 0.8% when compared to the previous month, of September 2019. 

Some 19.2% of sales took place online during the month. That’s up from 19% in September 2019, and from 18.2% in October 2018.

Across all sales channels, shoppers spent 3.2% more to buy 2.7% more goods, excluding automotive fuel, compared to last October. But compared to last month, shoppers spent 0.3% less and bought 0.3% fewer goods. 

Across the longer term, shoppers spent 0.5% more in the last three months to buy 0.2% more goods, again, excluding automotive fuel. 

The online picture

The strongest year-on-year growth was in non-store retailing (+13.8%), a category that is mostly made up of pureplay retailers but also includes market stalls and auctioneers. Some 78.6% of these sales were made online. Household goods stores (+11.4%) followed, with moderate growth from clothing, footwear and textiles retailers (+4.9%) and department stores (+3.1%). Online food sales grew by 2.2% compared to the same time last year. Sales in the ‘other stores’ category fell by 1.6%, a year on from growth of 23%.

The strongest month-on-month ecommerce growth was in household goods stores (+6%) , but there were falls in the clothing, footwear and textiles (-2.1%) where 18.5% of sales took place online, and food (-3.4%) categories. Some 5.4% of food sales were made over the internet. Department store ecommerce sales grew by 2.5% to account for 16.2% of retail sales in the category. 

Across all retail channels, department store sales grew by 2% compared to last month, and 0.2% compared to last year. The category was the only one to show growth compared to last month, with falls in clothing, footwear and textiles sales (-1%) and in sales of household goods (-1.3%).

The report focused on department stores when it said: “Feedback from retailers suggested that increased promotions had boosted performance. There was also evidence of retailers bringing forward the sale of Christmas product lines to earlier in November than in previous years.

“However the three-month on the same period a year earlier continues to show the underlying struggles faced by stores in this sector with a fall of -1.7% in October, the eighth consecutive month fall for this measure.”

Industry reaction

Commenting on the figures, Don Williams, retail partner at KPMG UK, said: “The latest retail sales figures from the ONS echo what many of the industry’s datasets have made painfully clear in recent months: consumer demand remains incredibly fickle in this volatile climate; growth is increasingly hard to achieve, and consumers are clearly thinking more carefully about their spend – hence the continued divergence between food and non-food retail categories.

“October naturally kicks off the all-important ‘golden quarter’, when many retailers achieve the vast majority of their annual revenue, making these months pivotal to the entire year’s success or failure. The latest figures suggest that sales have been somewhat static, many will be hoping that consumer demand is on hold in anticipation of Black Friday and Christmas to come. That said, retailers have already had to aggressively discount products to get stock moving after a series of disappointing months, so it remains to be seen whether further discounting to come will be to the detriment of the retailer’s bottom-line.

“Alongside the latest retail sales figures, the ONS insights into how our internet activity has influenced the way we shop makes for interesting reading. We all know that consumers have increasing turned online in search of better value, convenience and experience, and while growth is usually higher online, KPMG figures have showed that this too has started to slow.

“The truth is that the high street – despite all the well-publicised woes – still has a purpose and place for consumers. It’s just that it’s form and function is undergoing radical change, with legacy retailers on the forefront of this process. In these all-important final months of 2019, it will be vital for retailers to continue to challenge whether they have the perfect mix of physical and online offerings to remain firmly on the radar of time-pressed festive shoppers.”

Image: Fotolia

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