Web Shopping Slows in Britain

Economic woes have taken a bite out of online shopping, with year-on-year growth in September declining dramatically

Growth in online shopping spend appears to have slowed to a trickle as the economic downturn bites.

According to the latest IMRG Capgemini e-Retail Sales Index, year-on-year growth in online shopping in September 2008 reached 14 per cent—a dramatic dip from the year-on-year growth figure of 73.2 per cent in the same month a year ago.

Researchers said this September's growth figure was the third in a row that failed to reach 20 per cent.

However, what little growth there was last month was shared across product types, with all seeing some increase in online sales.

The biggest rate of growth was in clothing, footwear and accessories (up 24 per cent year on year) with shoppers seeming to take advantage of the early winter fashion deals in the coldest September since 2001.

However alcohol, gifts and electricals also showed an increase in spend, suggesting shoppers are stocking up for Christmas.

Capgemini head of consulting for retail Mike Petevinos said in a statement: "Today's economic climate is clearly having an effect [on e-retail figures]. What the figures show is how the internet is influencing consumer purchase decisions at a time where we are all seeking greater value for money."0

The e-Retail Index tallies with expectations at UK payments association Apacs, which predicts Christmas spending will grow by 15 per cent year-on-year.

The research comes as department store chain Debenhams yesterday released preliminary results for the 52 weeks to 30 August, showing its online sales are up by more than 60 per cent to £42m.

The share of Debenhams total sales made over the web increased from 1.1 per cent in the previous year to 1.8 per cent over the period, and visitor numbers also grew by 52 per cent to more than 43 million.

The retailer put the increase in sales volumes down to factors including better site-to-store integration so that customers are able to return unwanted items bought over the web.

Debenhams expects its online site to become its single largest store within a few years.