Online shopping growth reaches record low

UK online shopping growth reached a record low in January, according to the IMRG Capgemini e-Retail Sales Index.

Like-for-like growth was up by just 5% year on year, with UK shoppers spending £4.3 billion online in the month.

Retailers enjoyed strong sales in December 2009, managing to hold off on heavy discounting, but the result was weaker annual growth for January, said IMRG.

Monthly growth was down by 22% on December 2009. IMRG added that although this is in line with the usual seasonal trend of sales falling after the Christmas surge, the decline is greater than in recent years.

Tina Spooner, director of information, IMRG, said: “The weaker yearly growth in the UK e-retail market during January follows a strong December when online retailers were clearly well prepared for the festive season, indeed December 26 and 27 saw the highest sales for all of 2009.

“Less retailer discounting due to well planned stock levels and the increase in VAT equally appear to have had an impact on the online retail sector during January.”

Chris Webster, vice president, retail consulting and technology, Capgemini, said: “While annual growth for e-retail was slow in January, we should factor in the fact that December was a very strong month for the industry.

“Last January, e-retailers’ sales were buoyed up by heavy discounting and promotions that were necessary to sell stock left over from poor Christmas trading resulting from the impact of the recent move into recession.”