- £6 billion spent online during January
- Travel sector sees a very welcome 205% increase on December
- Average cost of holiday exceeds £1,000 for the first time as more affluent consumers continue to splash out
When compared with the high-street and wider retail sector, the continued resilience of e-retail in the face of economic uncertainty is clear. The British Retail Consortium reported a disappointing start to the year, with the traditional ‘bricks and mortar’ retailers indicating a year-on-year growth of just 2.1% . This poor result comes on the back of a continued decline in inflation, which suggests more needs to be done to reinvigorate consumer spending on Britain’s high-street.
Travel sales bounced back in January, following five consecutive months of decline, with sales soaring 205% on December. It is typical for travel to see an increase at the start of the year, as once the expense, and stress, of Christmas is out of the way, families look to book their summer holiday. But, for the first time since the sector was first tracked in December 2008, the average spend on travel has exceeded £1,000, which suggests that while the majority of Brits are finding their finances squeezed, the more affluent shopper is able to splash out on luxurious holidays.
Outside of travel, January saw a steep decline on December, with alcohol reporting a drop of 66% – a result, no doubt, of Brits looking to detox after Christmas. The clothing sector saw a monthly decline of 38% and while a drop in January across all sectors is typical, sales of clothing have recorded low levels of year-on-year growth for the third consecutive month, likely to be a result of the relatively mild winter.
Chris Webster, head of retail consulting and technology at Capgemini says: “There’s little cheer in these results for retailers. While the consumer price inflation is steadily decreasing, it has thus far failed to reinvigorate consumer spending. The steady march of customers moving from the high street to online channels continues and if anything, accelerates as savvy shoppers look to make their wages stretch further.”
Tina Spooner, Chief Information Officer at IMRG, commented: “The January results reveal a solid start to the year for online retailers and there are several interesting factors we see from these figures. The first is the average travel spend exceeding £1,000 for the first time as, while many consumers look to curtail their expenditure on luxuries, the more affluent consumers can still look to treat themselves with an expensive holiday. The second factor is the lack of a small spike in spending in late December / early January, usually influenced by the post-Christmas sales initiatives. This could be due to the fact that heavily discounted products have been consistently available for months, so the introduction of a new sales period would have had less impact.
“Thirdly, there may be an emerging trend in the sales of clothing. In recent years, this sector has recorded average growth of over 20% but year-on-year growth has slowed considerably in recent months, recording average growth of just 11% between November 2011 and January 2012.”
Chris Clarkson, Co-Founder and Marketing Director at Sunshine.co.uk said:
“It’s certainly encouraging to see a sales growth within the travel industry after a period within which it was suffering from some turbulence and we have also been lucky enough to see growth. As for average spend breaking the £1000 barrier for the first time, we have definitely seen this to be the case on sunshine.co.uk. Tour operators and airlines have been cutting back on capacity of late, which means slightly higher costs for the consumer, but due to the fact people are viewing the annual holiday as a necessity, rather than a treat, they’ve still been willing to spend.”
Notes to Editors
IMRG (Interactive Media In Retail Group) is the UK’s industry body for e-retail. Formed in 1990, IMRG is setting and maintaining pragmatic and robust e-Retail Standards to enable fast-track industry growth, and facilitates its community of members with practical help, information, tools, guidance and networking. Consumers can be confident when dealing with IMRG Members because all have committed to operate using methods that are Honest, Decent, Legal, Truthful and Fair, and have undertaken to not bring the industry into disrepute. The strength of IMRG is the collective and co-operative power of its members. For more information please visit http://www.imrg.org/ or email email@example.com
Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working, the Collaborative Business ExperienceTM. The Group relies on its global delivery model called Rightshore®, which aims to get the right balance of the best talent from multiple locations, working as one team to create and deliver the optimum solution for clients. Present in more than 30 countries, Capgemini reported 2009 global revenues of EUR 8.4 billion and employs 90,000 people worldwide.
More information is available at www.capgemini.com.
Rightshore® is a trademark belonging to Capgemini
About the ‘IMRG Capgemini e-Retail Sales Index’
The IMRG Capgemini Index, which was started in April 2000, tracks ‘online sales’, which we define as ‘transactions completed fully, including payment, via interactive channels’ from any location, including in-store. These sales are predominantly internet-based today, but the Index remains ready to record e-retail sales conducted via whatever interactive channels the market may embrace in the future.
Over one hundred e-retailers now regularly contribute data to the IMRG Capgemini Index, including; Airport Parking & Hotels Ltd, Amara, Arcadia Group (Burton, Top Man, Top Shop, Dorothy Perkins, Evans, Wallis, Miss Selfridge), Ask Direct, ASOS.com, Bank, Berry Bros & Rudd, Binends.com, Blacks, Boden.co.uk, Boohoo.com, Boots Direct, Boutique to You, Brandosa.co.uk, Brora, Buyagift.com, BuyItDirect.co.uk, Carphone Warehouse, Charles Clinkard, Charles Tyrwhitt, Clarks, Cloggs, Cocosa, Co-operative Travel, Crocus.co.uk, Dabs.com, Damart, Debenhams, Ethical Superstore, Figleaves.com, Firebox, First Choice, Freemans Grattan Holdings, Furniture123, Game, Gameplay, Gamestation, Getting Personal.co.uk, Greenfingers.com, Home & Cook, House of Fraser, JD Sports, J D Williams, John Lewis Partnership, Ladderstore.com, Lastminute.com, LK Bennett, Lookfantastic.com, Lyco Direct, M and M Direct, Marks & Spencer, Matalan, Millets, Naked Wines, NaturalCollection.com, New Look, Next, Peacocks, Perfect Handbags, PetPlanet.co.uk, Philip Kingsley, PIXmania, Prezzybox.com, Purely Gadgets, QVC, Redfoot Revolution, Richer Sounds, Sainsbury’s, Scales Express, Schuh, Scott, Shoe-Shop.com, Shop Direct Home Shopping (Additions, Great Universal, Kays, Littlewoods, Empire, Woolworths, Very, Isme), Serenata Flowers, Size, Sofa and Home, Sunshine.co.uk, Tesco.com, The Fragrance Shop, The Health Supermarket, The Natural Store, TUI UK, Turton Wines, Waitrose, Warehouse, Wilkinson Hardware & Wynsors World of Shoes.
 Calculation by 6 billion, divided by adult population of UK (50,893,318) http://www.google.co.uk/publicdata/explo re?ds=d5bncppjof8f9_&met_y=sp_pop_to tl&idim=country:GBR&dl=en&hl =en&q=uk+population