Internet Retail Sales Power ahead in September over 10% in month and year to date

It’s the third Thursday of the month so The Office for National Statistics (ONS) published the monthly retail sales figures for July today (pdf) Full details  are available on the ONS site.

Overall figures of a 2.2% increase showed a return to growth after the disappointing decrease last month and were marginally ahead of expectations. Looks as if we’re spending on our homes again with furnishings contributing to the growth. The weather remains subdued! (in terms of its influence on this months statistics)!

Our Internet sales headlines:

  • Internet sales up at 10.2% again in the month and 10.1% year to date on all retail sales..
  • Online food sales at 3.4% of all food sales were in line with their year to date levels.
  • For every £1 spent in the online retail sector 46 pence was spent on non-store retailing 39 pence in non food stores and 15 pence in food stores! This compares with ALL Retail excluding online of 3p for non-store 47p in non food stores and 50p on food!
  • All internet sales excluding food were 16.1% (16.1% revised) and have now been within a range of 15.4% -17.1% since November last year.
  • The decline in the rates of growth of the major online only retailers noted in previous months starting with the Olympics last year have now virtually normalised to the average of over 20% as recorded since the statistics were first compiled. These figures include the online sales of all the majors ie  Apple, Google, eBay, Amazon (including LoveFilm), Asos, Netflix and Shop Direct (Isme Very, Littlewoods etc)

September quarter three and year to date stats for internet sales:

  • Months sales 10.2% (9.8% revised) of all retail sales
  • Quarters sales 9.9% (Q2 9.9% revised) of all retail sales
  • Year to date sales 10.1% (10.0% revised1) of all retail sales
  • Monthly year on year increase of +19.1%.(+22.5% revised1)
  • Quarterly year on year increase +17.9%.(Q2 +15.5% revised1)
  • Moving Annual total increases (1) on August 2013 annualised +18.6% (2) on September 2012 +15.5%
  • The UK’s *largest online retailer is included in the group Non-store retailing and this sector shows growth of 21.1% on 2012 and accounts for nearly 50% of all online retail sales. This is an area which SHOULD just grow & grow unless further analysis is undertaken of this channel!

As always the “history” has been revised1 by the ONS which this month went back as far as August 2012 with mainly minor changes to both Internet sales and all Sales (mainly slight decreases for both).

The ONS words are:

Internet Sales – Key points

  • Average weekly spending online (Internet sales values non-seasonally adjusted) in September 2013 was £615 million. This was an increase of 19.1% compared with September 2012.
  • The amount spent online accounted for 10.2% of all retail spending excluding automotive fuel.
  • In line with recent periods, more was spent online in the non-store retailing sector than any other sector. Spending online accounted for 66.5% of total spending in this sector. In the food sector 3.4% of spending was online. This sector has the lowest proportion of online spending in relation to all spending.

Internet sales in detail

Internet sales are estimates of how much was spent online through retailers across all store types in Great Britain. Figures are non-seasonally adjusted and the reference year is 2010=100. Table 2 shows the year-on-year growth rates for total internet sales by sector and the proportion of sales that each sector makes to total internet sales.

Table 2: Summary of Internet Statistics for September 2013

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 weekly Internet sales figures by sector and the proportion they represent of all online sales. (We have corrected a misstatement of these %’s in last months table).

Sector summary

The non-store retailing sector comprises of stalls and markets, mail order and those retailers that sell mainly online.

* 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.

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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 £32.2 billion an increase in the month (adjusted re restatements and revisions) of 1.55% annualised 18.6%. The average this year is 14.3%. The long term compound average growth rate (from 2007) is a 23.3%.

Click to enlarge

The published weekly figures at £615 million was ahead of our estimate (£600) and we also beat our £32 billion moving annual total target. October marks tha sr=tart of the spendfest season so we so we will go big and look for a jump to a £680+ million target alongside a moving annual total of over £32.7 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)  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 (March June September and December are 5 week months). 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.

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