UK e-retail growth slows in February to lowest rate since January 2010

Online retail growth in the UK slowed down this year with sales in February showing the lowestincrease since January 2010 but boosted by Valentine’s Day presents, according to figures from the

The IMRG Capgemini e-Retail Sales Index reveals that shoppers in the UK spent a total of £5.4billion online during February 2012, equivalent to 10% growth year-on-year, but representing onlyhalf of the growth rate in February 2011 (20%).

IMRG reiterated that this year’s February growth of 10% comes off the back of a particularlystrong February 2011. It said the slowdown may also come from factors such as the gradual phasingout of heavy discounts/sales during December and January.

E-retail sales in February were boosted by Valentine’s Day on 14 February, which istraditionally associated with romantic presents. As a result, gifts purchased online showed a 26%month-on-month increase and 22% year-on-year. Similarly, lingerie, accessories and health &beauty products recorded a year-on-year jump of 27%, 30% and 32% respectively in February. “WhileBritish shoppers are tightening belts in response to ongoing economic uncertainty, they are happyto splash out on treats for their loved ones,” IMRG commented.

The clothing industry showed an unusually low growth rate in online sales for the fourthconsecutive month with only a 9% year-on-year increase in February. However, this is on the back ofa very strong February 2011 with 34% growth. Strong growth was reported in alcohol sales forFebruary compared to January with a considerable increase of 21%, “suggesting the post-Christmasdetox is well and truly over”.

IMRG explained that the February growth was also due to a high performance of online-only/catalogue retailers with year-on-year increase of 13%. They performed better than the multichannel/ high street retailers (defined as having both an online and a ‘bricks and mortar’ presence), withonly 8% growth.

Tina Spooner, Chief Information Officer at IMRG, said: “Although growth in e-retail sales waslower than expected in February, it has to be considered in the context of the 20% rise seen inFebruary 2011, so double-digit growth is still a positive result.”

“It appears evident from the sales growth recorded by online-only/catalogue retailers overrecent months that consumer confidence in the online channel is increasing. These results suggestconsumers who may have initially looked to trusted high street brands when shopping online for thefirst time are now becoming more confident in purchasing from pure-play e-retailers. It is alsointeresting to note that the average e-retail spend for online-only/catalogue retailers is 10%higher than during the same month last year, while for multichannel/high street it is actually 8%lower,” she said.

Chris Webster, head of retail consulting and technology, Capgemini UK, added: “It is veryinteresting to see the growth of online-only retailers exceeding that of the multichannel. Lowfootfall and a disappointing performance on the high street could be affecting the multichannelretailers’ online counterparts. Online-only retailers’ rapid innovation and adoption of growthareas in e-retail, driven by mobile and click ‘n’ collect, seem to have put them ahead once again;now is the time for the multi-channel retailers to respond.”