Christmas cheer for online retail

Christmas cheer for online retail

Online sales of Non-Food products in the UK grew 15.1% in December versus a year earlier, when they had risen by 7.0% over the previous year. This is the best performance since June. December’s online sales performance was ahead of its 3-month and 12-month averages of 12.3% and 12.4%, respectively.

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Christmas cheer for online retail
  • Online sales of Non-Food products in the UK grew 15.1% in December versus a year earlier, when they had risen by 7.0% over the previous year. This is the best performance since June. December’s online sales performance was ahead of its 3-month and 12-month averages of 12.3% and 12.4%, respectively.

  • In December 2015, Online sales represented 19.7% of total Non-Food sales, against 17.3% in December 2014, meaning almost 1 in 5 pounds was spent online. This is the second highest penetration of 2015, indicative of the popularity of online shopping in the run-up to Christmas and during the early January sales.

  • Toys & Baby Equipment was the second fastest growing category and achieved its best performance since June. This was followed closely by Furniture and Homewares, the latter grew at its fastest rate since the inception of this monitor in December 2012.

  • Online sales contributed 3.0 percentage points to the year-on-year growth of Non-Food total sales in December, the highest on record, while stores made a negative contribution.

Helen Dickinson, Chief Executive, British Retail Consortium, said:“This was very much an online Christmas with this channel playing a vital role in driving retail sales in December. Growth was up 15.1 per cent, ahead of its 3-month and 12-month averages of 12.3 and 12.4 per cent respectively, and December’s online penetration rate was the second highest of 2015, at 19.7 per cent, up from 17.3 per cent the same time last year. The proportion of online spend was up across all categories we measure with household appliances, footwear and furniture leading the way. Over the three months to December, online contributed 2.5 percentage points to UK non-food growth overall, confirming this channel as the key driver of growth. In fact, store sales were in reverse.

“Click & Collect continued to be instrumental, providing convenience for consumers and equipping smaller format stores with extended product ranges during the busy Christmas period. There were also some knock-on benefits, such as encouraging greater footfall into stores in turn inspiring impulse buys.”

David McCorquodale, Head of Retail, KPMG, said: “With 190% of average rainfall in December, many consumers chose to login rather than walk in over the festive period. There was marked increase in online shopping this year with that channel producing its highest contribution percentage to non-food sales growth compared to a decline in store growth.

“Whilst the weather was one reason for this, another is a significant shift in consumer behaviours with online channel more convenient and logistics and fulfilment networks becoming increasingly slick. The online phenomenon is clearly here to stay and will continue to challenge the role of the store. 2016 will no doubt bring further innovation in this arena as retailers strive to deliver a seamless omni-channel experience.”

Notes

The Online BRC-KPMG Retail Sales Monitor measures changes in the actual value (including VAT) of online retail sales, excluding automotive fuel. The Monitor measures the value of spending and hence does not adjust for price or VAT changes. If prices are rising, sales volumes will increase by less than sales values. In times of price deflation, sales volumes will increase by more than sales values.

Retailers report the value of their online sales for the current period and the equivalent period a year ago. As a result, indicators like the online penetration rates may vary as the RSM sample of participating retailers changes.

Total Non-Food sales growth is the percentage change in the value of all retail sales with the exception of food sales compared to the same period a year earlier. The total Non-Food sales measure is used to assess market level trends in Non-Food retail sales. Non-Food retail spending represents approximately 55% of total retail sales.

Online (including mail order and phone) sales of Non-Food are transactions which take place over the internet, or via mail order or phone. Online sales growth is the percentage change in the value of online sales compared to those in the same period a year earlier. It is a guide to the growth of sales made by all non-store channels.

Penetration is the proportion of sales attributed to the online channel (including mail order and phone). Penetrations are calculated category by category as online sales submitted by participating retailers relative to total sales those retailers submit to the BRC-KPMG Retail Sales Monitor. Participants who do not sell online (or through non-store channels) are included but participants who do sell online but do not submit their online sales are excluded.

The responses provided by retailers within each sales category are weighted* to reflect the contribution of each category to total retail sales, thus making it representative of UK retail sales as a whole. The rates used are derived from the Office of National Statistics Family Spending Survey and revised every year. Because the figures compare sales this month with the comparable period last year, a seasonal adjustment is not made. However, changes in the timing of Bank Holidays and Easter can create distortions, which should be considered in the interpretation of the data.

In its role as sponsor of the BRC-KPMG Retail Sales Monitor, KPMG is responsible for the aggregation of the retail sales data provided by the retailers on a weekly basis. This data consists of the relevant current week’s sales data and comparative sales figures for the same period in the prior year. The aggregation has been performed by KPMG on data for periods following 2 April 2000 and equivalent prior periods. The accuracy of the data is entirely the responsibility of the retailers providing it. The sponsorship role has been performed by KPMG since 10 April 2000 and the same for the aggregation of comparative sales figures for the period from 2 April 2000 it is not responsible for the aggregation of any data included in this Monitor relating to any period prior to 2 April 2000.

*The aggregation and weighting of data for the ‘online’ monitor has been performed by the BRC and KPMG for periods starting 25 November 2012 and equivalent prior year periods. Prior to that date, the online figures in this monitor refer to the unweighted Non-Food non store indicator, as published in the BRC-KPMG Retail Sales Monitor until July 2013.

The commentary from the BRC is intended to be of general interest to readers but is not advice or a recommendation and should not be relied upon without first taking professional advice. Anyone choosing to rely on it does so at his or her own risk. To the fullest extent permitted by law, KPMG will accept no responsibility or liability in connection with its sponsorship of the Monitor and its aggregation work to any party other than the BRC.

© Copyright British Retail Consortium and KPMG (2014). The contents of this report and those of all ancillary documents and preparatory materials are the sole property of BRC and KPMG and are not to be copied, modified, published, distributed or commercially exploited other than with the express permission of BRC or for the purposes of journalistic comment and review. All rights reserved.Covering the five weeks 29 November – 2 January 2016Media EnquiriesBritish Retail Consortium 21 Dartmouth StreetLondon SW1H 9BP020 7854 8900www.brc.org.ukMedia: 0207 854 8924media@brc.org.ukKPMG15 Canada SquareLondon E14 5GL020 7311 1000www.kpmg.co.ukJessica Liebmann, 0207 311 3245mobile: 07551 135 778jessica.liebmann@kpmg.co.ukThe January 2016 Monitor, covering the four weeks 3 January – 30 January, will be released at 00.01am Tuesday 9 February 2016.The British Retail Consortium (BRC) is the UK's leading retail trade association. It represents the full range of retailers, large and small, multiples and independents, food and non-food, online and store based.Sponsored and Administered byKPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.Detailed weekly data by category is available to retailers who contribute to the monitor:If you would like to participate in the Retail Sales Monitor, please contact:Anne Alexandre0207 854 8960anne.alexandre@brc.org.uk

Media Enquiries:

British Retail Consortium

21 Dartmouth StreetLondon SW1H 9BP

T: +44 (0) 20 7854 8900

www.brc.org.uk

The January 2016 Monitor, covering the four weeks 3 January – 30 January, will be released at 00.01am Tuesday 9 February 2016.The data is collected and collated for the BRC by KPMG.

The British Retail Consortium (BRC) is the UK's leading retail trade association. It represents the full range of retailers, large and small, multiples and independents, food and non-food, online and store based.Sponsored and Administered byKPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.Food Data Supplied byIGD makes a difference by providing international market intelligence, supply chain best practice and consumer insight to the food and grocery industry worldwide.We work with consumers, companies and individuals across the chain to provide authoritative information, insight, thought leadership and leading edge best practice to help companies grow their business and develop their people.Detailed weekly data by category is available to retailers who contribute to the monitor:If you would like to participate in the Retail Sales Monitor, please contact:Anne Alexandre0207 854 8960 – anne.alexandre@brc.org.uk

Media:

T: +44  0(2)07 854 8924

media@brc.org.uk

KPMG

Jessica Liebmann

T: +44 (0) 2073113245

M: +44 (0)755135778

E: jessica.liebmann@kpmg.co.uk

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