Slowest online growth since April 2013
In what is a post-apocalyptic financial crash world, the past 12 months have seemingly reported little but good news. From positive retailer trends, GDP which has performed steadily, onto a housing market that is decidedly buoyant and finishing upon employment figures that have suggested the economy is heading in the right direction.
Given this strong performance (which, it may be said was at least partially responsible for the outcome of the 2015 election) financial commentators and analysts alike are seemingly sensitive and quick to pick up upon data that contrasts to world leading final performance. A recent press release from KPMG takes a look at just such an example, specifically concerning a range of statistics that highlight a disappointing performance for retail during August 2015.
August 2015: Making sense of the retail landscape
“With the summer bank holiday delaying purchases and many consumers jetting off out of the UK in search of warmer climates, August saw a slowdown in e-commerce growth across almost all categories with non-food online sales up just 6.5 per cent versus 2014”.
David McCorquodale, Head of Retail, KPMG
Retailer trends-the exact statistics behind August’s stunted growth
The following statistics summarise just how online sales have performed during August 2015:
- Like-for-Like sales (exclusive of new stores) fell by 1% compared to August 2014 which has seen a growth rate of 1.3%
- In the three months up to August Non-food sales declined for the first time since the August of 2014
- Online sales saw significant falls which slowed from 19.8% in August 2014, to rate of 6.5% in August 2014.
Key to this performance has been two contrasting facts: first that sales have grown overall (both online and in retail), and second and most importantly that this growth has been subject to rates considerably lower than in the two previous years. Needless to say, such a situation may be far from ideal, it is a world away from the ever decreasing sales seen during the most turbulent of financial times. What’s more the expert opinions of Helen Dickinson, (director General of the British Retail Consideration) and of David McCorquodale (Head of Retail at market research organization KPMG) both serve up some solid reasons behind the statistics. Briefly summarised these identify the exodus of consumers going on holiday, a changing within the summer bank holidays dates and poor performance within the fashion sector.
“August was always going to be tough in comparison to last year which had seen the fastest growth since our online monitor started in November 2012, driven by very strong fashion sales. To make things worse, the summer bank holiday fell outside this month’s coverage, when a lot of people would have bought back-to-school clothes and back to university furnishings. Combined, those factors led to the slowest online growth for non-food since April 2013”.
Helen Dickinson, Director General, British Retail Consortium
August and the retail outlook going onwards
“Despite this, online penetration rates remain stable at 17.2 per cent and retailers will be hoping for cooler autumn weather to entice consumers back to the virtual aisles ahead of the Christmas rush”.
David McCorquodale, Head of Retail, KPMG
Given the reasons behind the slowing of sales there may be little to worry about in relation to ongoing issues for September onwards. Although as retailers ramp up for the cooler months and the Christmas sales period, they’ll likely have in mind that 2014 was subject to the worst retail performance since the financial crisis (The Telegraph 2015).
To this end pricing strategies led by comprehensively gathered pricing intelligence may well be key in defining between the retainers that recoup loses seen over August, and those who are set to repeat the festive performance of 2014 for another year.
“Retailers will hope to recoup that sales deficit in September and to start feeling the effect of higher real wages.”
Helen Dickinson, Director General, British Retail Consortium
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