May sees sales rise online, but fare less well on high street

May was a good month for users of e-commerce fulfilment, with Internet retail surging, according to the most recent Online Retail Sales Monitor of the British Retail Consortium. However, a supermarket price war meant that sales were not so strong on the high street, as revealed by the accompanying BRC KPMG Retail Sales Monitor.

The month saw 17 per cent growth in the Internet sales of non-food products, meaning that they represented 18.7 per cent of all UK retail sales. Sales a year earlier - in May 2013 - had risen by 9.9 per cent. By contrast, in May 2014, there was a mere 2 per cent increase in total UK retail sales compared to the same point the previous year, and like-for-like sales only saw a 0.5 per cent rise.

KPMG head of retail, David McCorquodale, described the figures as reflecting a "race to the bottom" by supermarkets reducing prices to maintain volumes. He said that the "price war" was "hindering the retail sector's overall recovery, which without the effects of these cuts would have seen like-for-like sales outpace inflation over the last quarter."

Among online sales, there was especially pronounced growth in the clothing and footwear categories, neither of which had recorded such strong figures since late 2012. Helen Dickinson, BRC director general, also cited broader ranges as helping to power online growth.

She commented: "Britain's fashion retailers are leading the way in developing their digital offering for discerning customers and that is really paying off in resulting sales figures.

"This month sees the highest growth in online sales of clothing for five months and the proportion of purchases we are making online has grown several percentage points in a year. This also represents the highest penetration ever recorded for clothing since the inception of the online monitor. Footwear is telling a similar story where great websites and good online service have led to the second-highest proportion of footwear sales online ever recorded by our monitor."

Not only were such ranges as games consoles and garden furniture broadening with the consequence of higher sales, said Dickinson, but World Cup-themed products were also beginning to be sold, "across all gender and age groups."

There were many lessons to be gleaned from the figures by the users of e-commerce fulfilment services, added McCorquodale, who said that it was "vital" for the "unbridled insight" into customer behaviour given to retailers by the rise of online to be used in their strategies.

He observed: "Online sales surged ahead in May, driving a third of non-food sales growth for retailers over the quarter and underscoring the importance of having a strong multichannel business. As the shift to online slowly continues, retailers must invest in analysing the data they are gathering about their online customers and use this to improve their total proposition."