Keep an “i” on our week – At the Races Edition

This week we produced our regular review of October’s Internet Retail Sales

October Internet Sales Decline and may be Flatlining

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

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:

Key points

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.

Key Points:

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.

Internet Sales

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.

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.

Click to enlarge

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%.

Click to enlarge

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.

Keep an “i” on our week, Blooming Early Winter edition

We had our regular monthly article on retail sales which shows them returning to all time highs again in September.

Our favourite violinist Lindsey Stirling released another of her impressive videos (Round Table Rival)a couple of weeks ago which we will leave you with:Incidentally her tour comes to the UK this week in London then Manchester.

September Internet Sales at all time high

The Office for National Statistics (ONS) published  at the end of last week the monthly retail sales figures for September (pdf) Full details  are available on the ONS site.

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:

Key points

  • 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.

Key Points:

  • 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.

Internet Sales

Table 5: 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.

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.

Click to ...

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%.

Click to ...

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.

Keep an i on our week, fall beck edition

It was definetly Apple‘s week & this included:

In addition to putting back our clocks, here in the UK tonight, the annual poppy appeal has got under way and we have already put on our poppy (Picture courtesy of the Royal British Legion)..

The Royal British Legion site is where you can find out about many of the activities which will be taking place and how you can support this years appeal which is aiming to raise £40 million.

An excellent start we, thought, with Joss Stone‘s recording of No Man’s Land (Green Fields of France) which is available we believe to download from 2 November but can already be pre-ordered NOW from all the usual suspects as well as the Poppy Shop:

We’ll leave you with the video

Keeping an I off Apple Watch

We think apart from the sort of spotting of some grey shoots of recovery in Apple revenue figures that possibly the most noteworthy disclosure in the results concerned a, arguably forward looking statement as follows in the *conference call.

Nancy Paxton -  Senior Director of Investor Relations

“We’ll be creating a new reporting category called other products. This will encompass everything we report in the accessories category today including Beats headphones and speakers, Apple TV and peripherals and accessories for iPhone, iPad, Mac and iPod.

In addition, we will begin to include iPod sales in the other products category and we will also reflect sales of Apple Watch in this line item once it begins shipping in early calendar 2015.”

So is Apple Watch a product group as, possibly, indicated in their Store header or like Apple TV is it a sort of hobby?

We’ve had a feeble attempt at restating the latest quarters figures to see what it might look like. In practice we expect iTunes etc to be promoted. Going way back in time iPod was of course the first new product group after Mac starting in 2004 and likely being the largest revenue generator from 2005 through 2007 or 2008 when it was overtaken by the iPhone.

We guess that as with recent restatements only the last couple of years will be included in fiscal 2015 results.

The categorisation of the Watch as an Other product we regard as being defensive and to an extent Tim Cook’s reaction in the *conference call when directly questioned by Ben Reitzes on the topic really confirmed this.

Ben Reitzes – Barclays

“… Tim, I was wondering what we were to make out of your new segments with the Apple Watch being in the other category. We were just a little surprised to hear that because it seems like such a substantial new category and you could sell may be even tens of millions of unit.

So by putting it lumped in the other with iPods and a lot of other things, does that say something about your expectations for that product or do you think that you’ll just break it out after a little while?”

Tim Cook – CEO

“Probably it says nothing about our expectation for the product. We didn’t form those categories based on expectations. We looked at current revenue, today revenue, and decided that we would leave everything that wasn’t a Mac, an iPad, or an iPhone or a service in one kind of category.

In the future, we might decide something different, but for now, in Q1 we’re not shipping any iPhone or excuse me, Apple Watches and so it seems appropriate to start it that way.

And also to be also straight is I am not very anxious in reporting a lot of numbers on Apple Watch because of the — and giving a lot of detail on it because our competitors are looking for it and so aggregating it is helpful from that point of view as well.”

At the minute if it looks like, smells like, and is categorised as an accessory, (within Other products) then that’s what it is likely to be and remain, we think, and we are disappointed. But then you would expect us to be lobbying  for an iWatch product group wouldn’t you!

 

* Extracts from Seeking Alpha’s transcript

Thinnest increase in Apple revenues

Apple results, for their Q4 2014 (13 weeks ending September 27) were released around 9.30 pm BST on October 20  followed fairly rapidly by their Conference Call at 10pm BST (2pm PDT) See Update 2 below for replay

Update (2) am BST October 21:

From Apple:

From elsewhere:

Instant analyst opinions/headlines:

Our view – Separate post to follow

Update (1) 9.45 pm BST October 20:

Revenues and  EPS way above analysts estimates & Apple guidance – share price up marginally by about $1 so far!

  • Q4 Revenues/EPS: $42.1bn/$1.42
  • Q4 Unit sales (millions) iPhones –39.3, iPads – 12.3,  Macs – 5.5,  iPods 2.6

Q1 – 2015 Guidance Revenues/Gross margin $63.5-$66.5 bn / 37.5% – 38.5%

Original post am October 20 WITH SCHEDULE UPDATED WITH ACTUAL FINANCIALS

The, sort of, headline figures to look out for we think are:

  • Annual revenue increase is likely to be around 5% (if their guidance mid point of $38.5bn is met) which we think is the lowest since 2001 when there was a decrease!
  • If their revenues are less than $39.3bn this quarter the growth rate will show less than 1% of an increase in the moving annual total in the quarter.
  • Quarter 4 results consensus (Professionals/The Street) Revenues / Earnings per share – $40bn / $1.30
  • Quarter 1 2015 mid guidance consensus Revenues / Earnings per share – $65bn / $2.40
  • The Apple Watch won’t impact revenues until likely later in 2015.

Click to enlarge

The source of much of our information is Philip Elmer-Dewitt  of Fortune to whom we, and likely many others are indebted.

Our normal graphic uses his info for the Professionals and Amateurs figures and the mid guidance information from Apple. We also add our guesses. We’re going for a rounded and, sort of, low key set of results this time!

We will report back later after the results are released and the Conference call has taken place. Usually the Q & A session are worthwhile.

Keep an “I” on our week, Matilda edition

Our most popular articles this week were:

As there is at least some promotional work around concerning the Sun / ITV’s Good Morning Britain with their Take 10 or Read on Get On encouraging parents to read with/to their kids we thought we’d contribute with Roald Dahl‘s Matilda which can be read in full from most of your devices!

The Skinniest Thinnest Apples

The media event yesterday as anticipated produced updates for iPads (iPad air 2 & iPad mini 3) the iMac with a new 27” 5k retina display together with a quicker and cheaper Mac mini. There were also quite a few words about the iPhone 6 an d Apple Pay (commencing Monday 20th October).

Mr Cook was, to us, a little more humorous than usual and this was also attempted by some of his colleagues. You can review his and the product intros with their video of the event. Its about 80 minutes in total, but if after Mr Cook’s intro if you fast forward to about 35 minutes that’s when the new iPads start appearing (all with touch id incidentally).

Having mentioned the rather larger September event apparently it cost around $1 million which to us is not a huge amount in the context of their sales and marketing activities.

Continuing on the humorous note when Craig Federighi was talking about the programming language Swift he said that it’s new enterprise partner was both impressed by & also using it widely. We were very amused by appleinsider’s live commentator when he blogged “iBM excited about Swift”. Nice touch we thought!

Next week on Monday October 20 you can tune in at 2pm PT to catch the audio of the live conference call to discuss their FY 2014 Q4 results which will have been released about 30 minutes earlier.

We do like Apple‘s skinny product line picture & hope they don’t mind us using it. 10/10 for whoever or the agency which came up with the idea!

Tablets phablets everywhere

As Apple inadvertently leaked its new iPad family members  (we will report back after the official launch later today) Google announced its new (mainly Nexus) range yesterday with a sort of  9, 6, player headline with an associated lollipop!

We’re surprised / disappointed that there’s not a smaller tablet even an 8 would have been our preference.

The 9 & 6 tablet/phablet will be available for pre order  in the UK likely next month but the player (their new set top streaming box) has no UK release indications yet. No formal prices for the UK yet but early indications are  Nexus 9 (from) – £250 ish / $349 and Nexus 6 (no contract) – £420 ish / $649.

The phone is from Motorola and the tablet from HTC.

Google had their traditional blog post on the new products and were unsurprisingly concentrating on the android brand. Especially the “and” bit andyou!

We’ll leave you with their video.