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September ecommerce sales remain higher than last year but subsiding from peaks seen this summer: ONS

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Just over a quarter of UK retail sales took place online in September, according to the latest official figures – as ecommerce sales growth continued to outpace last year’s levels, but calmed from peaks seen during and after lockdown.

Some 27.5% of retail sales took place online last month, the ONS Retail Sales report for September 2020 estimates. That’s well up on the 20.1% of sales that took place online in February 2020, before the Covid-19 lockdown started in March. But it’s lower than peaks of 33.3% in May and 31.8% seen in June  – and suggests that ecommerce is beginning to settle at a level between the two. Online shopping’s share of transactions may well be pushed up, however, during local lockdowns – and especially in Wales, where non-essential shops are now closed until November 9. 

“In September, we saw strong growth in value sales across all sectors when compared with the same month a year earlier,” said the report. “This is because of online sales reaching higher than usual levels over the course of the pandemic.”

Across sales channels, the September figures suggest, shoppers spent 6% more than a year ago to buy 6.4% more goods – excluding automotive fuel. They spent 1.5% more than the previous month 1.6% more goods. Compared to February’s pre-pandemic level, total retail sales, again, excluding automotive fuel, were 6.5% higher in value and 7.0% higher in volume. When automotive fuel is included, shoppers spent 17.7% more in the most recent three months compared to the previous three months to buy 17.4% more goods – that, said the report, is the “biggest quarterly increase on record as sales picked up from record-low levels experienced earlier in the year”. 

How shoppers spent online in September

Ecommerce spending grew by 53% in value in September compared to the same time last year – but was 1.2% lower than in the previous month of August.

Food saw the fastest online growth, with ecommerce sales up by 91.5% on last year, although down by 1.5% on August. The proportion of sales made online has almost doubled to 10.4% from pre-pandemic February, when 5.4% of grocery spending was done online. 

Non-food sales continue to account for a higher share of spending, with 23.7% of sales taking place online in September, up from 16.1% in February. Non-food sales grew by 61.4% on last year, and fell back by 0.4% on the previous month.

Among multichannel retailers, department stores saw the largest proportion – 30.8% – of sales take place online, up from 16.6% in February. Sales grew both on last year (88%) and the previous month (+6%). 

“Department stores were the only stores to increase sales in September when compared to August at 6%,” said the report. “Feedback from these stores stated that the online pre-ordering of a new range of gaming products helped boost their sales.”

Clothing, footwear and textile sales was the category with the weakest year-on-year ecommerce growth (+27.7%) and sales were down by 1.7% on last month, to account for 27.5% of sales – up from 20.7% in February. 

And household goods stores saw the biggest month-on-month online fall (-4.4%) as shoppers were perhaps more likely to go in-store to buy – just over a fifth (22.3%) of sales in this category were online. But online sales were still well up on the same time last year (+61.6%), with the proportion of sales taking place online still clearly ahead of the 14.5% that did so in February. 

The ‘other’ stores category has seen the smallest shift to online spending among non-food categories. ‘Other’ stores include electricals retailers, which saw 17.9% of sales take place online in September – up from 12.7% in pre-pandemic February. Internet sales were up by 90.9% on last year but down by 1.4% on August. 

The non-store retailing category, which was 81.9% online in September (and 84% in February) is primarily made up of pureplay retailers. This group saw sales lift by 38.5%, but fall by 1.8% on last month. 

Industry analysis

Ken Daly, chief executive of JML, said: “The fact that retail sales have recovered to their pre-pandemic level betrays a more nuanced picture, which sees some retailers still struggling from lockdown related measures whilst food and online specialists surge. With Christmas likely to be under some sort of lockdown restraint nationally, it’s a trend I’d expect to grow further from the results which show a staggering shift to online retail – now accounting for 27.5% of all purchases compared to February’s 20.1%. It reiterates the necessity that where possible, retailers should have multiple means of distributing their products to consumers.
“But there’s no doubt that all retailers will nevertheless welcome the traditionally high spending Christmas period after a bruising year. The BRC’s earlier comments encouraging shoppers to start preparing early for Christmas makes sense – as not only may it nurse further growth as we close out October, but it will make spikes in supply chains more manageable – crucial in a context where logistical operations need to be safely socially distanced.
“Earlier Christmas preparations will also be welcomed from a consumer point of view, as social distancing will likely mean more celebrations with fewer people as the rule of six and separate bubbles make traditionally larger celebrations unfeasible. This may therefore see gifts exchanged more in the run up to and after Christmas Day, meaning an increased festive period not only useful for retailers, but vital for shoppers too.”

ParcelHero  head of consumer research David Jinks said: These figures are a boost to High Street stores as shoppers prepare to decide how they will shop this Christmas. Even so, despite a slight fall of -1.2 against last month, online’ s 53% growth points the way. Scotland’s National clinical director, Jason Leitch, got a lot of flak yesterday for stating Scots should prepare for a digital Christmas but these figures reveal that online sales will soar throughout the entire UK.

“Sales between July-September were up 17.7% which is heartening. Department stores’ 6% online jump in one month was notable. An amazing 30.8% of all department store sales in September were online. Not every month will see pre-ordering open for two major new games consoles, but it does point the way to a digital Christmas this year.”

David Ringer, UK managing director of loyalty card app Stocard, said: “The impact of local lockdowns and other restrictions will continue to create challenges for the retail sector.  If the ONS figures are anything to go by, grocery stores and online retailing will be the biggest winners in the run up to the crucial Christmas period.

“While it’s encouraging to see growth across all measures, it’s understandable but also notable that non-food retail is growing at a slower rate than food. With Christmas approaching, these retailers should note that online spending still remains higher than pre-pandemic, and utilise those digital channels accordingly.

“Non-essential retailers will need to take a different approach to ensure they are maximising opportunities to win trade and engage with more shoppers where it is safe and legal to do so. While online traffic will still drive a lot of pre-Christmas sales, those same digital touchpoints are where retailers can also share messages that will help drive customers back in stores where possible. In-store transactions are still where retailers will see the highest margins, so it is vital to keep shoppers updated with the latest offers and incentives to encourage more shopping trips.”

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