Overall figures showed an increase in sales volumes of 0.8% (including fuel) on last month which according to Bloomberg was greater than its estimate of 0.3% obtained in a news survey of 23 economists. “Prices as measured by the retail-sales deflator fell an annual 1.5 percent in October, the biggest decline since 2002. Prices of auto fuel dropped 4.3 percent to the lowest level since 2010.”
The ONS on their preferred quarterly view noted continuing growth ” The three-month on three-month movement in the quantity bought showed continued growth for the twentieth consecutive month increasing by 0.4%. This was the longest period of sustained growth since November 2007 when there were 25 periods of consecutive 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 fell back again this month (0.6%) for the fifth time this year.
- The seasonally adjusted figures start from 2008 and in the 6 previous years a maximum of 3 monthly falls occurred in each of 2010, 2011, 2012 and 2013.
- This is the seventh consecutive month when internet sales have been above 11%.
- The Non Store Retailing sector which includes the likes of Amazon and other wholly online retailers seems to be levelling out rather than showing an increase and since its peak in May at over £360 million per week seems to be stuck in a range of between £352 – £357 million.
- Internet food sales continue at close to their all time high again this month at 3.8% of all food sales. and reached over £112 million for the second consecutive month.
- 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.
October and year to date stats for internet sales:
- Months sales 11.2% (11.3% last month 10.7 % a year ago) of all retail sales
- Monthly year on year increase of 7.5% (9.2% last month 18.5% a year ago)
- Year to date increase on 2013 is 12.1% (12.6% last month)
- Moving Annual total increases (1) on September 2014 annualised +5.6% (2) on October 2013 +14.4%
- The UK’s *largest online retailer is included in the group Non-store retailing and this sector shows growth of 9.2% 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 0.1% to account for 11.2% of all sales in October 2014. Online sales increased by 7.5% compared with October 2013, this was the lowest year-on-year increase since November 2012 (6.9%).
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 October 2014 was £719.6 million. This was an increase of 7.5% compared with October 2013. This is the lowest year-on-year increase since November 2012 when it was 6.9%.
- The amount spent online accounted for 11.2% of all retail spending excluding automotive fuel, compared with 10.7% in October 2013.
- The online spend in other stores decreased by 18.2% compared with October 2013. This is the lowest year-on-year spend in this store type since December 2011 when it fell by 20.5%.
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 October 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 £37.4 billion an increase in the month of 0.5% annualised 5.6%. The average this year is 14%. The long term compound average growth rate is around 15%.
The published weekly figure was £719.6 million which was well below our expectations but we only just fell short of the moving annual total which came out £0.1 billion below our estimate.
The average monthly increase this year is now about 0.5% but has been negative in 3 out of the last 4 months. We are optimistically looking for a seasonal recovery above average an increase of around 0.75% next month so we’re going for £725 million in November and a moving annual total of about £37.7 billion.
We have again included our experimental graph (e & o e!) showing the relative internet and non-internet, moving annual total, sales from late 2009 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.