Online sales growth dampened by sunny May

| Press release
According to the latest figures from the IMRG Capgemini e-Retail Sales Index, the online sales has fallen to its lowest level ever, 8.2% as compared to 30.9% in 2008.
  • 8% year on year growth is lowest in history of the Index
  • Monthly decline of 3.5% in May attributed to sunny bank holiday
  • Holiday season sees health and beauty sales grow by a fifth

The latest figures from the IMRG Capgemini e-Retail Sales Index reveal growth in online sales has fallen to its lowest ever level, 8.2% compared to 30.9% in 2008, as the recession and higher than average temperatures took their toll on spending habits. The decline of 3.5% on April sales bucks usual seasonal trends and represents the first monthly decline for May since the Index started. Despite the slowdown in growth, sales of over £3.7 billion in May prove robust underlying strength in online sales.

Mike Petevinos, Head of Consulting for Retail for Capgemini UK, said:
“Although online sales remain healthier than on the high street, UK shoppers are clearly changing their behaviour as a result of the recession – even those heading online to economise are now beginning to trim spending habits. So, whilst the underlying trend is still one of growth for online retail, the market conditions are placing all retailers under intense pressure to ensure their offerings remain competitive.

Those who support their customers to shop in the way they want to and don’t lose sight of them as they move between the store, the web and the phone will gain added advantage in providing a compelling shopping experience too. This is a key goal of true multi-channel retail and will become increasingly important.”

Sector splits
The warmer weather benefitted the health and beauty sector, which saw impressive monthly and yearly growth, perhaps fuelled by an increase of spending on sun cream and moisturiser as Brits made the most of two sunny bank holiday weekends. The electrical sector also appears to be holding up well during the recession, with year on year growth of 28%.

After a notable growth of sales in alcohol online in April ahead of the budget, spending dropped off in May after higher levies were imposed by the Treasury. Online sales for alcohol declined both on a year-on-year and month-on-month basis, by 6.5% and 17.4% respectively.

Sector% Change Month on Month% Change Year on Year
Total Market-3.5%8.2%
Beers, Wines and Spirits-17.4%-6.5%
Clothing, Footwear and Accessories-4.0%8.2%
- Accessories3.0%69.9%
- Footwear3.7%4.1%
Electricals-5.7%27.9%
Gif ts4.2%-0.3%
Health and Beauty14.9%26.3%
Lingerie26.7%-10.2%

Tina Spooner, Director of Information at IMRG concluded:
“Almost any business would be delighted with an 8% growth in the current market conditions so while this is a poor performance in internet shopping terms, actually it is very positive compared to high street sales, which rose just 0.8% in May.

Consumers today are making very considered purchasing decisions, relying heavily on the internet to qualify their buying both online and in traditional stores, so online retailers will be the first to see ‘green shoots’ when the economy finally begins to stabilise”.

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.

Over one hundred e-retailers regularly contribute data to the IMRG Capgemini Index, including Airport Parking & Hotels Ltd, Adili.com, Arcadia Group (Burton, Top Man, Top Shop, Dorothy Perkins, Evans, Wallis, Miss Selfridge), ASOS.com, Beautique.com, BeCheeky.com, Binends.com, Black Essentials, Blacks, Boden.co.uk, Boohoo.com, Boots Direct, Brora, Buyagift.com, Carphone Warehouse, Charles Tyrwhitt, Clarks, Cloggs, Comet, Co-operative Travel, Crocus.co.uk, Dabs.com, Damart, Daxon, Debenhams, Dobbies, 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, Home & Cook, Interflora, JD Sports, J D Williams, Jack Wills, Jason Shankey, John Lewis Partnership, Ladderstore.com, La Magia, La Redoute, lastminute.com, Lighting-Direct, LK Bennett, Lookfantastic.com, M and M Direct, Made in Sheffield, Marks & Spencer, Millets, Monster Travel, Musto, Naked Wines, New Look, Next, Peacocks, Perfect Handbags, PetPlanet.co.uk, PIXmania, Prezzybox.com, QED-UK, QVC, R C Roland, Redcats UK, Redfoot Revolution, Retro36, Richer Sounds, Rubber Sole, Scales Express, Shoe-Shop.com, Shop Direct Home Shopping, Schuh, Serenata Flowers, Shudoo, Slurp.co.uk, Sunshine.co.uk, Tesco.com Wine, Tesco Electrical, The Fragrance Shop, The Health Supermarket, The Jewellery Channel, The Sunday Times Wine Club, TUI UK, Turton Wines, Vertbaudet, Vie at Home, Waitrose, Wallace Sacks, Wilkinson Hardware & Wine Hound.

Quotes from retailers:

Rowan Gormley, Founder and CEO of Nakedwines.com said: “Our May sales are 23% up on April, largely driven by our social networking model”.

Julie Ireland, Director of Perfect Handbags comments: “Our May sales were much higher than expected, more than 40% up on April and more than double our sales in the same period last year.”

Jason Russell, General Manager of Beautique.com said: “Our sales are up significantly on last year, although given that we are a start-up this is to be expected. We have seen a definite improvement in seasonal sales lines such as suncare products, which have shown dramatic increases in sales, accounting for 25% of our business in May. Online customers are still very much looking for luxury products but also wanting value for money.”

Press Contacts:

Melissa Au
020 7025 6417
(melissa.au@redconsultancy.com)

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