Online retail sales returned to double-digit growth in September, banishing the disappointment of a sluggish end to the summer.
After a weak August left a damaging mark on internet sales, September saw a 12% increase on the same period last year, according to the latest figures from the IMRG Capgemini e-Retail Sales Index.
The September performance was boosted by the late summer bank holiday, which fell within the first week of the month, helping the Index grow 8% on August, although growth was still “slightly lower” than might have been expected, IMRG said.
Alex Smith-Bingham, head of digital, consumer products and retail at Capgemini, suggests shoppers could be saving their cash in anticipation of a bigger spend-up in the coming months. “As we approach the busy Christmas period, and with Black Friday just a few weeks away, it will be interesting to see whether British shoppers have intentionally held back for the heavy discounting the festive season brings,” he said.
One emphatic trend to emerge from the findings was the growth of sales made via mobile devices. Transactions through smartphones and tablets saw an astonishing 41% increase in September, compounding the 43% growth that has been witnessed so far in 2015.
September’s performance helped the Index to grow 10% during the third quarter of 2015, and as the sector prepares itself for the busy Christmas period, the year-to-date growth remains at 10%.
IMRG’s optimistic outlook is shared by the KPMG/Ipsos Retail Think Tank (RTT), which said that the health of the overall UK retail sector has now improved for the fourth quarter in a row.
Its index increased one point for the fourth consecutive quarter, the first time it has happened since 2010.
Of the three key drivers of retail health – demand, margin and cost – it was demand, once again, that had the most positive impact on retailers in Q3, KPMG said. Retailers benefitted from real wage growth, strong consumer confidence levels and rising employment levels, all of which encouraged customers to the tills.
Dr Tim Denison, head of retail intelligence at Ipsos Retail Performance, said: “The narrative for quarter three was a continuation of the progress made over the previous 12 months. Retailers have found their feet again, despite the enduring tough trading conditions and continue to move forward with omni-channel integration.
“Retail health in quarter four will be a wrestling match between demand stimulation and cost management, as retailers prepare for the introduction of the first phase of the living wage legislation. Raising productivity in the sector will help make it affordable and how to achieve efficient staff scheduling is, inevitably, one of the hottest topics of the moment.”
Ipsos said the biggest threat on most retailers’ horizon, and one that is creeping ever closer, is how and when to implement the living wage. By April of next year, it said this is going to impact heavily on everyone, and with the additional costs comes strategies to counteract – whether that is to raise prices or invest in workforce optimisation – it’s a challenge that will play a big part on the retail health index in 2016.