Overall figures showed a decrease in sales volumes of 0.3% (including fuel) on last month which according to Bloomberg was greater than its estimate of (0.1%) obtained in a news survey of 18 economists. The weather returned to the fore with its warmth attracting blame for delays in Autumn / Winter clothes purchases.
The ONS on their preferred quarterly view noted, sort of, continuing but somewhat muted growth ” The underlying pattern continues to show growth with the rolling three-month on three-month growth rate increasing by 0.3%. However, this was the slowest growth seen in this measure throughout 2014.”
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 back again to their all time high of 11.4% of all retail sales.
- This is the sixth consecutive month when they have been above 11%.
- After some significant revisions to previous months figures (in particular to non store retailing which eg last month was increased by over 6%) there does seem to be a slow down in overall internet sales this quarter with a growth rate of quarter on quarter of some 0.7% compared to a comparable figure last year of over 3%
- The Non Store Retailing sector which includes the likes of Amazon and other wholly online retailers seems to be leveling out rather than showing an increase and since its peak in May at over £365 million per week seems to be stuck in a range of between £352 – £358 million.
- Internet food sales reached an all time high again this month of 3.9% of all food sales.and reached over £110 million for the first time.
- For every £1 spent in the online retail sector 49 pence was spent on non-store retailing 36 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
September, quarter 3 and year to date stats for internet sales:
- Months sales 11.4% (11.4% last month 10.6 % a year ago) of all retail sales
- Monthly year on year increase of 10.1% (13% last month 18% a year ago)
- Quarter on quarter increase is 0.7% (last quarter 6.6% 2013 Q3 – 3.1%)
- Year to date increase on 2013 is 12.7%
- Moving Annual total increases (1) on August 2014 annualised +9.4% (2) on September 2013 +15.4%
- The UK’s *largest online retailer is included in the group Non-store retailing and this sector shows growth of 13.5% 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 online sales were unchanged in September 2014 compared with August 2014 at 11.4%. Online sales increased by 10.1% compared with September 2013.
Internet Sales in Detail
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 2011=100.
- Average weekly spending online in September 2014 was £731.8 million. This was an increase of 10.1% compared with September 2013.
- The amount spent online accounted for 11.4% of all retail spending excluding automotive fuel, compared with 10.6% in September 2013.
- The online spend in department stores increased by 7.0% compared with September 2013. This is the lowest year-on-year increase since November 2010 (6.3%).
Table 5 shows the year-on-year growth rates for total Internet sales by sector and the proportion of sales made online in each retail sector.
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 £37.2 billion an increase in the month of 0.9% annualised 9.4%. The average this year is 15%. The long term compound average growth rate is around 22%.
The published weekly figure was £731.8 million which was in line with our expectations and due to historic revisions the moving annual total came out at £0.2 billion ahead of our estimate.
The average monthly increase this year is now about 0.8% but has been flat in the last quarter. we are optimistically looking for an increase of around 0.7% next month so we’re going for £735 million in October and a moving annual total of about £37.5 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.