Capgemini: Christmas sales kick off: double digit growth

21 November 2014 Consultancy.uk

After disappointing September sales numbers, spending in October is back on track with double digit growth of 14%, indicates the IMRG Capgemini e-Retail Sales Index. The growth, which according to the researchers indicates that the Christmas season has begun, is mainly caused by the strong performance of the Clothing sector that saw an annual growth of 13.5% in October after a 0.3% growth in September.

For almost 25 years, consulting firm Capgemini together with the Interactive Media in Retail Group (IMRG), UK’s industry association for e-retail, publishes the IMRG Capgemini e-Retail Sales Index. This index tracks ‘online sales’, defined as ‘transactions completed fully, including payment, via interactive channels’, from any location, including in-store.

The latest edition of the IMRG Capgemini e-Retail Sales Index shows that sales in October were back on track after a disappointing September, with an annual double digit growth of 14% and a month-on-month growth of 7%, representing the highest level of growth between September and October for the past four years. Year-on-year, the UK online retail sector, excluding Travel, grew with 16%, which is a year-to-date growth of 17%. The spending increase was mirrored by sales made on smartphones and tablet devices in October, with an annual growth of 43% recorded, which is an 11% increase on September.

Christmas sales kick off- double digit growth

The index shows that an estimated £8.8 billion was spent online, which is the highest market value since December 2013, and according to the researchers an indication that the 2014 Christmas shopping period has started.

According to the researchers, the growth of the index was boosted by a number of key sectors, with ‘Clothing’ solid performance impacting the most. After its lowest ever annual growth in September (0.3%), Clothing has returned to double digit growth with 13.5% year-on-year, and an impressive growth of 63% for its sub-sector Accessories and 40% for Lingerie. Other sectors that performed well are the Home and Garden sector, Beer, Wine & Spirits, and Electricals, which had year-on-year increases of 65%, 19% and 17% respectively.

Alex Smith Bingham - Capgemini

The October index also showed a growing disparity between the Multichannel retailers and the online only retailers, with a year-on-year growth of 18% for multichannel versus 8% for pure play retailers. “Multi-channel retailers have been shifting their investments into digital strategies over the last few years, including sophisticated CRM platforms. This has enabled them to provide their customers with a joined up and integrated offering across all of their channels, something which is clearly having a positive influence on sales. As we fast approach the busy Christmas period, it will be interesting to see whether the online only retailers, which are typically able to compete in terms of cost, will be able to close this gap,” concludes Alex Smith-Bingham, Head of Digital, Consumer Products and Retail at Capgemini.

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Lack of high street openings sees UK retail in precarious state

11 March 2019 Consultancy.uk

Changes in consumer behaviour, particularly in favour of online shopping, are starting to take their toll on shop-fronts in the UK, while stagnant wages are hitting peoples’ willingness to go out for food and drink. As a result, the rate of closures is more than four times that for the same period in 2017, although largely reflecting of a lack of new openings.

The retail market has fallen under a cloud of uncertainty in the UK; consumer confidence has dipped, while wages have continued to malinger in negative territory. Retailers are also under pressure from disruptive technology, as consumer sentiment shifts to more online shopping and at-home leisure. While retailers have been able to weather the storm for the past years, transformations, low consumer spending and technology have begun to take their toll.

New analysis from PwC explores the current market conditions in the UK for retail shops, focused on net openings and closings. The market changes in the UK have seen the net closures to date hit 1,123 in H1 2018 across the UK’s top 500 high-streets. The rate of closures was considerably above openings for the first half of 2018, at 1,569 openings and 2,692 closures. Compared to H1 2017, more than four times as many shops closed than opened.

Openings and closures for retail industry

The study considered the most prominent areas to see a reduction in openings and net closures across the retail landscape. Overall, fashion stores were the hardest hit in absolute terms, with a total of 104 closures for H1 2018, followed by public houses and inns, which saw 99 closures in the same period. Electrical goods stores saw a net -44 decline, with a total of 8 openings for the period. Meanwhile charity shops were in a state of relative flux, with 80 openings to 117 closures. The firm notes that service sector shops, including estate agent, banks, recruitment agencies and travel agents, among others, too have begun the process of moving online.

Not all areas of retail saw closures, with coffee and ice cream shops seeing a small net increase in openings over all. Book stores – predictions of their total obliteration appear to have waned – saw a net 18 openings, while supermarkets drew the highest overall growth relative to closures, at 18 opened and 6 closed.

Regional figures for the UK

Not all areas have seen the same level of closures, with the Greater London area and the South East the hardest hit by the current wave of closures, at -268 and -197 net change, respectively, compared to -23 and -25 closures for the same period in 2017. The middle of England too saw considerable closures, with the West Midlands clocking a net -89, and Yorkshire and the Humber down -117 stores overall.

Commenting on the figures, Lisa Hooker, consumer markets leader at PwC, said, “Openings simply aren’t replacing closures at a fast-enough rate. Specifically, the openings across ‘experiential’ chains, such as ice cream parlours, beauty salons and vape shops, haven’t been enough to offset closures in the more traditional categories. Looking ahead, the turmoil facing the sector is unlikely to abate. Store closures already announced in the second half of the year due to administrations and CVAs already will further intensify the situation.”

Related: Artificial Intelligence offers $340 billion opportunity to retail sector.