British Internet Retail Sales account for all of March Retail Sales increase

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

Overall figures showed an increase in sales of  0.1%% on last month which contrasted with expectations of a fall following February’s strong performance. The good weather got an honorable mention!

All the figures we quote are now the new seasonally adjusted statistics issued by the ONS. January 2014 was the one year in six when an extra week occurs statistically and we have annotated our headline graph to show an approximately comparable level of sales.

Our Internet sales headlines:

  • Compared to February internet sales rose by 1.4%  (£9.5 million) and without this increase ALL retail sales would have fallen in the month on a weekly basis.
  • Internet sales , excluding food, have flatlined as a percentage of all sales since March 2013 varying between 17.1% and 16.5% on a monthly basis. March was 16.6% and the average over the period was16.7%.
  • Internet sales remain at over 10% of all retail sales (excluding automotive fuel) for the 13th consecutive month.
  • Online food sales continue to exceed £100 million a week for the sixth consecutive month and increased by 1.2% in the 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! 

March and year to date stats for internet sales:

  • Months sales 10.7% (10.6% last month 10.5 % a year ago) of all retail sales
  • Quarterly increase on Q4 2013 0.5% and Q1 2013 9.9%
  • Monthly year on year increase of 7.1%.(11.5% last month 18.8 % a year ago)
  • Moving Annual total increases (1) on February 2014 annualised +6.7% (2) on March 2013 +16.1%
  • The UK’s *largest online retailer is included in the group Non-store retailing and this sector shows growth of 6.7% 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 are:

Key Points

The amount spent online increased by 7.1% in March 2014 compared with March 2013 and by 1.4% compared with February 2014.

Internet Sales in Detail

Seasonally adjusted Internet sales data are provided within this release. These seasonally adjusted estimates are published in the RSI tables (187 Kb Excel sheet) and include:

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

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 March 2014 was £680.3million. This was an increase of 7.1% compared with March 2013.
  • The amount spent online accounted for 10.7% of all retail spending excluding automotive fuel, compared with 10.5% in March 2013.
  • The online spend in department stores increased by 22.2% year-on-year but decreased by 8.2% in household goods stores.

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

Table 4: Summary of Internet Statistics for March 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.

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 January 2009  to an all time high of £34.8.billion an increase in the month  of 0.6% annualised 6.7%. The average this year is 14.8%. The long term compound average growth rate is around 23%.

Click to enlarge

The published weekly figure was £680.3 million which was well below our estimate as was the moving annual total at £34.8 billion!

The average monthly increase has been around 0.6% but we’re going for another above average April increase so are looking for £695 million and a moving annual total of close to £35 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. Due to the exceptional 5 week month in Jan 2014 there is a 6 yearly jump to allow for the 53rd week!

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 previous one being in 2008.

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