Yesterday was the third Thursday of the month so The Office for National Statistics (ONS) l published the monthly retail sales figures for October (Pdf) We’ve cut it down to exclude the 86 pages of tables. The full version is on the ONS site.
The overall figures have been greeted with dismay as there is no follow through occurring from the rather positive Olympics influence in the previous month or two and some were even shocked by the figures.
Our Internet sales headlines:
- Some further recovery again this month in the rates of growth of the major online only retailers which at least is now back into double figures (10.6%) eg Apple, Google, eBay, Amazon (including LoveFilm), Asos, Netflix and Shop Direct (Very, Littlewoods etc) plus others. Since August the average growth rates have been only 8.2% compared to an average of over 20% since the statistics were first compiled. These sales (see Table 3 below) comprise nearly 50% of the total internet sales (£256 million out of £562.3 million).
- We are slightly less bullish about achieving a £10 billion quarter for internet sales with October coming in at about what we expected rather than a hoped for upside. At the minute we reckon it could still be nearer £10 bn than £9.5 bn so we urge you all to go online & order all those tablets readers i and other phones NOW!
- Weekly sales at over £550 million will likely rise to over £700 million in November and in December to possibly over £800 million for the first time ever.
- Monthly year on year +11.0%.(+10.6%) growth still well below historic averages but some recovery after August revision up by to 10.6% from 9.4%
- Year to date October 2012/2011 + 16.1% (16.7%) again showing some slowing compared with previous historical growth rates.
- Moving Annual total increases (1) on August 2012 annualised + 9.6% (2) on October 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 December 2011 with only marginal increases in the internet sales figures of 0.1% in July and September.
The ONS words are:
- The average weekly spend online (Internet sales values non-seasonally adjusted) in October 2012 was estimated at £562 million, which was an increase of 11.0 per cent when compared with October 2011.
- The amount spent online was estimated to account for 9.4 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 62.2 per cent of total spending in this sector, up from 62.1 per cent in October 2011. In the food sector 3.2 per cent of spending was spent online, up from 2.8 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 Internet Sales.
Table 3, Internet sales summary of performance for October 2012
|Category||Weight||Year on year||Contribution||Weekly||% all sales|
|(YoY) growth||to YoY growth||sales £mn|
|(a) All food||17.3||15.6%||2.7%||89.0||3.2%|
|(b) All non-food||41.4||9.7%||3.9%||217.0||7.7%|
|Textile clothing & footwear stores||11.7||22.2%||2.7%||87.0||10.2%|
|Household goods stores||8.2||18.5%||1.6%||32.0||5.5%|
|(c) Non store retailing||41.3||10.6%||4.4%||256.0||62.2%|
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 sector information provided 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 £28.2bn an increase in the month (adjusted re restatements and revisions) of 0.80% annualised 9.6%. This is now the third consecutive month when single digit growth has been recorded and it continues to be well below the long term compound average growth rate (from 2007) of 25.8%.
The published weekly figures at £562.3 million was marginally above our prediction of £550 million but we were again £0.1bn below the annual figures at £28.3 billion. If we are going to hit that magic £10 billion figure in the quarter we need November to come in at a weekly figure of over £750 million which implies an annual figure of £28.8 billion or so.
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 (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.