Internet sales reduction contributes to lower retail sales in Jan

Today  The Office for National Statistics (ONS) published the monthly retail sales figures for January (pdf) Full details  are available on the ONS site.

Overall figures showed a decrease of 1.5% on last month in the quantity bought  which was greater than expectations.

We are adopting for our internet sales figures the new seasonally adjusted statistics issued by the ONS. Whilst this may be an exclusive as the ONS are only selectively using them as this is our first month of usage there will likely be certain updates in future months!

January was the one year in 6 or so when a further week was added to the month so it is a 5 week month!

Our Internet sales headlines:

  • Internet sales remain at over 10% of all retail sales (excluding automotive fuel) for the 14th consecutive month.
  • Compared to December internet sales fell by 3.3% contributing 0.2% to the overall retail sales decrease in the amount spent of  1.8%.
  • Online food sales continue to exceed £100 million a week for the fourth consecutive month.
  • For every £1 spent in the online retail sector 47 pence was spent on non-store retailing 37 pence in non food stores and 16 pence in food stores!
  • We do think the ONS needs to do more analysis of internet sales as already nearly half 47% this month are effectively categorised as sales by online retailers virtually irrespective of the underlying goods or services!  

January stats for internet sales:

  • Months sales 10.3% (10.5% last month 10.0 % a year ago) of all retail sales
  • Monthly year on year increase of 8.9%.(11% last month 12.9 % a year ago)
  • Moving Annual total increases (1) on December 2013 annualised +26.9% (2) on January 2013 +17.1%
  • The UK’s *largest online retailer is included in the group Non-store retailing and this sector shows growth of 7.7% on 2013 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!

The ONS words this month (which contain a mix of seasonally (SA*) and non-seasonally adjusted (NSA) figures are:

Key Points

The amount spent online showed a similar pattern to the amount spent in store. Compared with January 2013 the amount spent online increased by 8.9%* but fell by 3.3%* compared with December 2013.

Internet Sales in Detail

Seasonally adjusted Internet sales data are provided within this release. These seasonally adjusted estimates are published in the RSI tables (165 Kb Excel sheet) and include:

  • A seasonally adjusted value index; and
  • Year-on–year and month-on-month growth rates.

ONS will publish the seasonally adjusted proportion of sales made online in the February 2014 bulletin in March 2014. More information on the seasonal adjustment of these estimates can be found in section 4 of the background notes or in The quick guide to Internet sales (106.3 Kb Pdf).

Internet sales are estimates of how much was spent online through retailers across all store types in Great Britain. The reference year is 2010=100.

Key Points

  • Average weekly spending online in January 2014 was £650million*. This was an increase of 8.9%* compared with January 2013.
  • The amount spent online accounted for 10.7% of all retail spending excluding automotive fuel. 
  • The online spend in textile, clothing & footwear stores was estimated at 12.9%

Table 4 shows the year-on-year growth rates for total Internet sales by sector and the proportion of sales that made online in each retail sector.

Table 4: Summary of Internet Statistics for January 2014

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 used seasonally adjusted figures throughout in our 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.

The moving annual total, which we report, moved up again (it has increased EVERY MONTH since January 2009  to an all time high of £34.2.billion an increase in the month  of 2.6% annualised 26.9%. The average this year is 13.5%. The long term compound average growth rate is 23.0%.

The published weekly figures was £650 million and tentatively we are looking for an increase to £665million in February and  a £34.5 billion moving annual total target.

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 which happened this year the last one being in 2008.

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