Online sales outperform the ailing high street

| Press release
Latest report shows an increase in sales compared to February last year.
  • Sales up by 13% in February compared to last year
  • January detox blown as alcohol sales rocket
  • Romance alive as Britons buy Valentine’s presents online

Latest figures from the IMRG Capgemini e-Retail Sales Index show that the sector is continuing to show resilience, with 13% year on year growth for February. Growth has been consistent for the last 8 months, as e-retail continues to grow despite the numerous casualties on the high street.

However, retailers’ competitive online promotions in January and the toughening retail market, as well as the fewer trading days available meant that UK shoppers reined in spending online in February compared to January, with a monthly fall of 11%. UK retail sales overall reflect this trend.[1]

Mike Petevinos, Head of Consulting for Retail for Capgemini UK, said: “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. 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.”

Sector splits

The Index reveals that there is variation in the growth of individual sectors. After a decline in January, sales in beers, wines and spirits rose by 30% in February – perhaps marking the end of January’s detoxing efforts.  The doom and gloom of the economy also appears not to have put an end to romance as sales of gifts online increased for the days before Valentine’s Day.

Despite a monthly fall in February, the clothing, footwear & accessories and electrical sectors continue to expand at a greater rate than the overall e-Retail market.

 

Sector  

% Change Month on Month  

% Change Year on Year  

Total Market  

-11%

13%

Beers, Wines and Spirits  

30%

10%

Clothing, Footwear and Accessories  

-6%

21%

Electricals  

-9%

28%

Gifts  

34%

-37%

Health and Beauty  

-5%

11%

Lingerie  

10%

-14%

 

Tina Spooner, Director of Information at IMRG concluded: “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. Internet shopping allows consumers to achieve these goals, while at the same time offering the convenience, choice and competitive pricing that shoppers demand.”

For further information please contact:

Luica Mak – 020 7025 6408 (luica.mak@redconsultancy.com)

Flora Hancox – 020 7025 6576 (flora.hancox@redconsultancy.com)

Notes to Editors

About IMRG

IMRG (Interactive Media In Retail Group) is the industry body for global e-retail. Formed in 1990, IMRG is setting and maintaining pragmatic and robust e-Retail Standards to enable fast-track industry growth, and facilitates its community of members with practical help, information, tools, guidance and networking. Consumers can be confident when dealing with IMRG Members because all have committed to operate using methods that are Honest, Decent, Legal, Truthful and Fair, and have undertaken to not bring the industry into disrepute. The strength of IMRG is the collective and co-operative power of its members.

About Capgemini

Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working, the Collaborative Business Experience. The Group relies on its global delivery model called Rightshore®, which aims to get the right balance of the best talent from multiple locations, working as one team to create and deliver the optimum solution for clients. Present in more than 30 countries, Capgemini reported 2008 global revenues of EUR 8.7 billion and employs over 92,000 people worldwide.

More information is available at www.capgemini.com.

About the ‘IMRG Capgemini e-Retail Sales Index’

The IMRG Capgemini Index tracks ‘online sales’, which we define as ‘transactions completed fully, including payment, via interactive channels’ from any location, including in-store.  These sales are predominantly internet-based today, but the Index remains ready to record e-retail sales conducted via whatever interactive channels the market may embrace in the future.

Around eighty e-retailers regularly contribute data to the IMRG Capgemini Index, Airport Parking & Hotels Ltd, Adili.com, Arcadia Group (Burton, Top Man, Top Shop, Dorothy Perkins, Evans, Wallis & Miss Selfridge), ASOS.com, BeCheeky.com, Black Essentials, Blacks, Boden.co.uk, Boots Direct, Brora, Buyagift.com, Carphone Warehouse, Charles Tyrwhitt,  Cloggs, Comet, Co-operative Travel, Crocus.co.uk, Dabs.com, Damart, Daxon, Debenhams, e-flowersUK.co.uk, Ethical Superstore, Figleaves.com, Firebox, First Choice, Freemans Grattan Holdings, Furniture123, Game.net, Gameplay.com, Getting Personal.co.uk, GreatValueJewellery.com, Greenfingers.com,  Interflora, JD Sports, J D Williams, Jason Shankey, John Lewis Partnership, La Redoute, lastminute.com, Lighting-Direct, Lookfantastic.com, M and M Direct, Made in Sheffield, Marks & Spencer, Millets, Monster Travel, Naked Wines, New Look, Next, Peacocks, Perfect Handbags, PetPlanet.co.uk, PIXmania, Prezzybox.com, QVC, R C Roland, Redcats UK, Redfoot Revolution, Retro36, Richer Sounds, Shoe-Shop.com, Shop Direct Home Shopping, Schuh, Serenata Flowers, Slurp.co.uk, Sunshine.co.uk, Tesco.com Wine, Tesco Electrical, The Fragrance Shop, The Health Supermarket, The Sunday Times Wine Club, TUI UK, Turton Wines, Vertbaudet, Virgin Vie at Home, Waitrose, Wilkinson Hardware, Webtogs and Wine Hound.

Quotes from retailers:

Rowan Gormley, Founder of Naked Wines said: “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 bouyant, 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 YOY from 2007, business is looking good for the North London company. 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.”


[1] http://www.brc.org.uk/details04.asp?id=1 525&kCat=53&kData=2