Online Sales for January Hit Record Low

Monday, March 1, 2010 - 10:41 by Simon Crisp

According to the latest e-retail sales index released by IMRG Capgemini, online sales for the month of January have been particularly low, rather to the surprise of some financial commentators. Given the receding recession, it would seem that many expected a more positive set of figures, despite the usual run-off in spending that follows the Christmas period. The annual growth for the 2009-2010 January sales total was, in all, five percent - the lowest recorded for shopping online sales for the month since the e-retail sales index began tracking. As a figure, this represents £4.3 billion spent by consumers last month.

However, Chris Webster, Capgemini's vice president of technology and retail consulting, considers that the sales index figures for January 2010 are in fact relatively ordinary, with the January 2009 figures constituting the anomalous data. Explaining the division between the figures, Webster put forward the explanation that, "last January, e-retailers' sales were buoyed up by heavy discounting and promotions that were necessary to sell stock left over from poor Christmas trading resulting from the impact of the recent move into the recession".

Others have considered the poor monthly performance from fresh perspectives, with some blaming the appalling January weather for the slump (citing lack of faith in deliveries). Others have remarked that the trend may be due to the growing concern surrounding a lack of safe shopping online resources, whilst another body of opinion suggests that the VAT increase has played its part in diminishing sales.

The vast majority remain positive about the state of shopping online for 2010. Bruce Fair, Kelkoo UK's managing director, noted that, "despite a significant slowdown in January, we are still predicting solid growth in the e-retail sector this year, with the market expected to grow by 12%".