Yesterday was the third Thursday of the month so The Office for National Statistics (ONS) published the monthly retail sales figures for August (pdf) We’ve cut it down to exclude the 88 pages of tables. The full version is on the ONS site.
Our Internet sales headlines:
- We find the figures difficult to understand/believe as it appears that the major online only retailers (as detailed yesterday) ie eBay, Amazon (including LoveFilm), Asos, Netflix and Shop Direct (Very, Littlewoods etc) plus others showed virtually no growth year on year (1%) when they have averaged over 20% since the statistics were first compiled as shown in the above graph.
- The ONS blame the Olympics but if as they say there is “a seasonal pattern” then we would encourage them to report it on a regular monthly basis as they do with non internet sales. We calculate that this Augusts sales represent 6.8% of the last years against an average since the statistics were compiled of 7.7%. That is statistically significant!
- We think this is a one off statistical quirk for whatever reason and will be eliminated/forgotten in the next few months.
- If Apple’s iPhone 5 introduction can add between 0.25% to 0.5% to the USA’s GDP in quarter 4 then we think Apple & Amazon (with their Kindle Fire introduction in the UK) can do wonders for our internet retail sales in the coming months!
- Year on year +7.5%.(+19.4%) so growth is shown as collapsing after July revision up by 5.7% from 13.7%
- Year to date August 2012/2011 + 16.8% (18.1%) a significant reduction in the growth rate again on a small upward revision (+0.3%) to July’s figures.
- Moving Annual total increases (1) on July 2012 annualised + 5.7% (2) on August 2011 +16.6%
- The UK’s *largest online retailer is included in the group (Non-store retailing) showing just 1.3% growth on 2011 and contributing only 0.4% to the overall growth of 7.5% (This is an area which is likely to just grow & grow unless further meaningful analysis is undertaken by the ONS)
As always the “history” has been revised by the ONS which this month went back as far as October 2011 with reductions to all sales and increases in internet sales in particular resulting in an increase in last months headline % from 8.5% to 9%.
The ONS words (and graphic) are:
The proportion of Internet sales decreased by 0.9 per cent between July and August 2012. Compared with a year ago, the proportion of Internet sales in August 2012 increased by 0.3 per cent. In August 2012 the estimated average weekly spend online was £466.1 million.
At a Glance
In August 2012, Internet sales (online sales for all retailers) were estimated to be 8.1 per cent of all retail sales (excluding automotive fuel). This is a fall from 9.0 per cent in July 2012 and the lowest proportion since August 2011 (7.8 per cent).
Figure 1, Internet Sales as a proportion of all retailing
Internet sales as a proportion of all retail sales have previously shown a seasonal pattern with the highest proportion of Internet sales in the November of each year. In previous years the lowest proportion of Internet sales has tended to fall in the second quarter of the calendar year (April, May, June). The proportion of Internet sales in August 2012 was estimated however to be lower than the second quarter of 2012. Feedback from online retailers suggests that sales were lower as consumers watched the Olympics instead of shopping online.
Internet sales in detail
Internet sales measure how much was spent online through retailers in Great Britain. Figures are non-seasonally adjusted and the reference year is 2010=100. Table 3 shows the year-on-year growth rates for total Internet sales, by sector and the contribution that each sector makes to total Internet sales.
Table 3, Internet sales summary of performance for August 2012
|Category||Weight||Year on year||Contribution|
|(YoY) growth||to YoY growth|
|(a) All food||17.3||20.7%||3.3%|
|(b) All non-food||41.4||9.8%||3.8%|
|Textile clothing & footwear stores||11.7||9.4%||1.0%|
|Household goods stores||8.2||5.2%||4.0%|
|(c) Non store retailing||41.3||1.3%||0.4%|
We have added our annotations to the ONS table) – The bold categories/ figures in the table are the primary constituents of the total (ie (a) + (b) + (c) = All retailing). Dept. stores, Textile etc, Household etc and Other stores are simply an analysis of (b) All non-food.
* Whilst the ONS will not confirm the names of specific retailers within categories they did say that retailers selling wholly online with no physical outlets would be included in the Non store retailing category along with eg online mail order retailers.
As previously mentioned the figures are no longer experimental.
The moving annual total, which we report, moved up again (it has increased EVERY MONTH since October 2007 being the first full year of reporting by the ONS) to an all time high of £27.6bn an increase in the month (adjusted re restatements and revisions) of 0.48% annualised 5.7%. This is the lowest increase since the statistic has been published and well below the long term compound average growth rate (from 2007) of 25.8%.
The published figures at £466.1million were well below (9.6%) our last months weekly forecast of £510 million. We were spot on the annual figures at £27.6 billion due to the large July revision! This month we confidently forecast that next months figures will contain revisions but we do expect a return to longer term growth figures and hence forecast weekly and annual figures of £540 million and £28 billion! This of course includes the first monthly recorded sales of the iPhone 5 and the introduction of Kindle Fire tablets in the UK!
We have again included our experimental graph (e & o e!) showing the relative internet and non-internet, moving annual total, sales from late 2007 by month. As before it highlights that high street sales have been and continue to go nowhere! As, we have mentioned before, the Boston Consulting Group forecast in their report (The $4.2 Trillion opportunity) that this trend is likely to continue with the high streets market share contracting at around 2.75% a year from 2010 through 2016.
Further details and explanations are either in the ONS release on the statistics or on their website. As previously mentioned a retail convention of a 4, 4, 5 week quarter is used by the ONS. To cater for the inconvenience of years not having 364 days every 6 years or so an extra week is included in the statistics. The ONS adds this in January.