Today is the third Thursday of the month so The Office for National Statistics (ONS) published the monthly retail sales figures for September (pdf) We’ve cut the pdf down to exclude the 102 pages of tables. The full version is on the ONS site.
The overall figures have been generally well received as they are ahead of average estimates.
Our Internet sales headlines:
- Whilst there has been some recovery this month in the rates of growth it still looks as if the major online retailers eg Apple, Google, eBay, Amazon (including LoveFilm), Asos, Netflix and Shop Direct (Very, Littlewoods etc) plus others continue to show much slower growth rates over the last couple of months (7.6%) than have been experienced historically when they have averaged over 20% since the statistics were first compiled.
- The apparent seasonal pattern means that (based on 2011) in the first 9 months of the year about 2/3 of the annual internet sales will likely have occurred.
- There have already been some pretty significant revisions to August’s figures with the as we called it, “unbelievable” figure for Non Store retailing year on year growth being revised upwards form 1.3% to 6.6%. Still room for further revisions in the months to come perhaps!
- We think that it is possible for internet sales, with a bumper holiday season, to reach approaching £10 billion in the next 3 months. Last year they were £8.2 billion. With Apple’s iPhone 5 introduction + MiNi iPads, Amazons new UK device introductions (Kindle Fires & new eReader products) together with Microsofts Windows 8 and Surface tablet launch alongside other aggressive online promotions and mobile eCommerce activity they may just reach this historic level.
September & third quarter increases:
- Monthly year on year +9.4%.(+7.5%) growth still well below historic averages but some recovery after August revision up to 10.0% from 7.5%
- Quarter 3 is +13.8% year on year but virtually flat compared with the 2nd quarter of 2012.
- Year to date September 2012/2011 + 16.4% (16.8%) again showing some slowing compared with previous historical growth rates.
- Moving Annual total increases (1) on August 2012 annualised + 9.5% (2) on September 2011 +16.3%
- The UK’s *largest online retailer is included in the group (Non-store retailing) showing just 8.6% growth on 2011 and contributing 3.6% to the overall growth of 9.4% (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 November 2011 with reductions to all sales and increases in internet sales in particular resulting in an increase in last months headline % to 8.3% from 8.1%.
The ONS words are:
• The average weekly online spend (Internet sales values non-seasonally adjusted) in September 2012 was estimated to be £507.8 million, which was an increase of 9.4 per cent when compared with September 2011.
• The amount spent online was estimated to account for 8.8 per cent of all retail spending excluding automotive fuel.
• More was spent online in the non-store retailing sector than any other sector.
Spending online now accounts for 63.0 per cent of total spending in this sector up from 62.9 per cent in September 2011. In the food sector 3.1 per cent of spending was spent online, up from 2.7 per cent a year earlier. This sector has the lowest proportion of online spend in relation to all spending.
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
Table 3, Internet sales summary of performance for August 2012 (with I.co.uk **additions)
|Category||Weight||Year on year||Contribution||Weekly||All sales|
|(YoY) growth||to YoY growth||sales £mn %|
|(a) All food||17.3||15.5%||2.7%||83.8||3.1%|
|(b) All non-food||41.4||8.0%||3.2%||195.3||7.3%|
|Textile clothing & footwear stores||11.7||13.7%||1.6%||71.7||8.8%|
|Household goods stores||8.2||10.4%||0.9%||30.2||5.5%|
|(c) Non store retailing||41.3||8.6%||3.6%||228.6||63.0%|
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. **We have also added the Category analysis provided by the ONS for weekly Internet Sales.
* 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 £27.9bn an increase in the month (adjusted re restatements and revisions) of 0.79% annualised 9.5%. This together with last month and one other are the only times since the statistic has been published that only single digit growth was recorded and well below the long term compound average growth rate (from 2007) of 25.8%.
The published weekly figures at £507.8 million were well below our last months weekly forecast of £540 million. We were marginally off (£0.1bn the annual figures at £27.9 billion. This month we are looking for a return to longer term growth figures and hence forecast weekly and annual figures of over £550 million and £28.3 billion!
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) http://i.co.uk/?p=4721 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 (September was a 5 week month). 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.