UK online sales in non-food goods continues to boom

Online sales of Non-Foods goods in the UK continue to grow, hitting 20% of total sales in February. A new report by BRC-KPMG, which considers the ups and downs of in-store and online sales growth, finds that the past three months in particular have seen in-store sales contraction or weak growth, while online growth dominates.

KPMG and the British Retail Consortium (BRC) released a new study, titled ‘The Online BRC-KPMG Retail Sales Monitor’, into the growth and penetration of online channels sales growth within the wider Non-Food retail sector. The Non-Food retail spending represents approximately 55% of total retail sales. The study defines ‘online’ as transactions which take place over the internet, or via mail order or phone.



Online penetration
The additional online sales avenues, particularly the internet shopping and mobile offerings, through which UK consumers are able to access goods, are continuing to see strong growth in use. The total number of Non-Food online sales in February this year hit 20.4% of total sales, increasing 10.7% on last year’s figure of 18.9%.

The results also show that, over the past three months, the growth of online channels for the provision of Non-Food goods has averaged 2.5%, and far outpaces store sales growth of 0.5%. In total, the Non-Foods sales market grew 3% over the past three months.



Online channel changes
The annual % change for online non-food sales growth has been up and down over the past year, although its 12 month rolling average stands well above 10%.

The continued growth trend at above 10% remains a positive for many Non-Food retailers, says David McCorquodale, Head of Retail at KPMG: “Online growth rates slowed in February in what is normally a quiet retail month. However, with this channel still showing double-digit growth and penetration above 20 per cent, it remains a very significant contributor to non-food sales growth. Much is being done to eliminate barriers between channels as the consumer is channel agnostic. However, the shift in shopping habits to the online channel is also bringing renewed focus on the role of the store.”



Online channel vs store growth
The level of growth contribution from stores and online, for non-food sales, varies considerably across the previous period. March last year, for instance, saw 2% store growth and 1.5% online channel growth, however, the following months saw store growth taper off while online growth increased slightly. The second half of the year had relatively strong store growth at around 1.5%, although December, with the observance of new shopping holidays, Black Friday and Cyber Monday saw store growth contract by -1% while online growth was up almost 2.5%. The subsequent months have seen store growth remain at around 0% and 0.5%, while online growth has exploded to average almost 3% in January and 2.1% in February.

Helen Dickinson, Chief Executive of the British Retail Consortium, remarks that: “The UK continues to be a global leader in online retail sales and this is down to the considerable investment British retailers continue to make in their online channels. With budget 2016 on the horizon, Government has an opportunity to enable retail to build on its position of global leadership by recognising the significance of the ongoing structural change and considering how, by working with the industry, risks of these changes to more deprived areas and the most vulnerable in the workforce can be addressed.”