Overall figures showed an increase in sales volumes of 0.4% (including fuel) on last month which according to Bloomberg was in line with estimates. Rather than the weather the EU got some credit for an increase in high powered vacuum sales ahead of new restrictions coming into effect in the near future.
The ONS on their preferred quarterly view noted continuing significant growth ” This year-on-year increase is now the 17th month of consecutive year-on-year growth and when this is coupled with the 18 months of consecutive rolling 3-months on 3-months growth it would be true to say that the underlying picture is one of growth.”
All the internet 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:
- Internet sales fall again at only 11% of all retail sales down from their all time high of 11.4% back in May.
- Internet sales down for third month in a row and are now 2.6% below the May level (July & August both down by 1.3%)
- Reduction is entirely in Non Store Retailing sector which includes the likes of Amazon and other wholly online retailers. The reduction from May is 8.2%. The rate of decrease seems to be accelerating and this month showed a reduction month on month of 12.8%.
- Internet food sales continue at their all time high levels and reached £109.3 million and are over £100 million a week for the eleventh consecutive month
- For every £1 spent in the online retail sector 48 pence was spent on non-store retailing 37 pence in non food stores and 15 pence in food stores!
- We do think the ONS needs to do more analysis of internet sales as already half are effectively categorised as sales by online retailers virtually irrespective of the underlying goods or services! These average YoY growth figures of over 20% but now show signs of the beginning of negative growth
August and year to date stats for internet sales:
- Months sales 11.0% (11.2% last month 10.6 % a year ago) of all retail sales
- Monthly year on year increase of 8.3% (12.9% last month 21.9 % a year ago)
- Year to date increase on 2013 is 12.1%
- Moving Annual total increases (1) on July 2014 annualised +6.2% (2) on July 2013 +15.5%
- The UK’s *largest online retailer is included in the group Non-store retailing and this sector shows growth of only 4.3% on 2013 this month 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:
The proportion of sales made online fell by 0.2% to account for 11.0% of all sales in August 2014. Despite this fall in the proportion of sales, the amount spent online increased by 8.3% in August 2014 compared with August 2013.
Seasonally adjusted Internet sales data are provided within this release. These seasonally adjusted estimates are published in the RSI internet tables 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.
- Average weekly spending online in August 2014 was £707.7 million. This was an increase of 8.3% compared with August 2013.
- The amount spent online accounted for 11.0% of all retail spending excluding automotive fuel, compared with 10.6% in August 2013.
- The online spend in textile, clothing and footwear stores increased by 27.3% year-on-year, feedback from retailers suggested that this was due to orders for children’s fancy dress costumes.
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 August 2014 (seasonally adjusted)
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.
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 £36.7.billion an increase in the month of 0.6% annualised 6.2%. The average this year is 13.1%. The long term compound average growth rate is around 23%.
The published weekly figure was £708 million which was well below our estimate but due to historic revisions the moving annual total came out just £0.1 billion below our estimate.
The average monthly increase this year is now down to 0.5% and we are uncertain as to whether this is a continuing trend we’re looking for some recovery next month so we’re going for £730 million in September and a moving annual total of close to £37 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.