Online shopping growth stalls as recession bites

E-commerce growth has fallen from 15 per cent to 12 per cent this year

Online stores are starting to feel the economic pinch, according to the latest figures from the IMRG Capgemini e-Retail Sales Index.

The survey of online businesses found that growth in the UK e-commerce market is set for a decline, despite strong sales in recent years. The IMRG predicted that online retail growth will shrink from 15 per cent to 12 per cent in the second half of 2009.

Sales are still predicted to grow, however. Online shoppers spent 12.3 per cent more in June 2009 than they did in June 2008, but they are spending at a much slower rate.

Some areas performed better than others, and the electricals and clothing sectors grew at a higher rate than the rest of the index.

"The online sales results for the first half of 2009 show a slight slowing of growth, as the recession weakens consumer spending on the web," said Mike Petevinos, head of consulting for retail at Capgemini UK.

"However, growth still looks set to continue for the rest of 2009 with our predictions being at around 12 per cent."

One significant change is in the number of purchases shoppers make on a single site. This 'conversion rate' had declined from between seven and eight per cent in 2007, to between five and six per cent in 2008 and to around four per cent in the first half of this year. The IRMG said that this should encourage firms to improve the services they offer to customers.

"Price continues to be a major factor for consumers when shopping online, with recent research suggesting that 90 per cent of UK households are adopting more prudent buying strategies to cope during the recession," said Tina Spooner, director of information at IMRG.

"It is clear that there will be challenges ahead in the coming months for e -retailers as they prepare for the lucrative festive season."