Mixed news for online retailers as sales grow but remain slow

E-retailers received mixed news today after figures revealed that online spending was lower than expected in the run-up to Christmas, but now enjoys the largest share of the UK retail market.

Figures from the Interactive Media in Retail Group (IMRG) and Capgemini's e-Retail Sales Index showed that online retailers saw an 11 per cent increase on November 2010 sales, below their 14 per cent prediction.

Chris Webster, head of retail consulting and technology at Capgemini, said that the firm had expected it be higher because many consumers buy goods online before December.

"A growth of just 11 per cent is very disappointing for this time of year as traditionally shoppers start their Christmas shopping early to spread the cost of presents over several pay cheques," he said.

"This does follow a particularly busy November last year, but nevertheless it is clearly a sign of consumers tightening their belts."

The figures from November 2010 were up 22 per cent from 2009, which IMRG chief information officer Tina Spooner said was driven by the huge snowfalls that swept across the UK last year, which had not occurred this year.

"We have not seen a repeat of the widespread snow disruption that heavily affected deliveries last year, so consumers may be more confident in leaving their shopping a bit later this Christmas," she said.

The report also noted that, while overall sales were not as high as expected, certain sectors performed strongly, the electronics sector in particular recording growth of 14 per cent year on year and a whopping 47 per cent month on month.

Meanwhile, data from the Office of National Statistics gave e-retailers reason to cheer, showing that the average weekly online spend rose from £546m to £787m between October and November.

This means that online sales now account for 12.2 per cent of all retail spend, the highest figure ever recorded for internet shopping.

Companies will no doubt be hoping that the Cyber Monday online shopping rush pushed sales for December high enough to make up the shortfall in November.