Online sales increase slows to record low

LONDON - UK online sales increased by 8.2% year on year in May, to £3.7bn, according to the IMRG Capgemini e-Retail Sales Index, the smallest rate of increase in the index's history.

Online sales: slowdown in May
Online sales: slowdown in May

The index also revealed that while online sales were up 8.2% year on year in May 2009, this is far behind the rise of 30.9% year on year in May 2008. The £3.7bn of online sales in May was also down 3.5% from April, and the report said this "bucks usual seasonal trends".

UK shoppers spent most in the health and beauty sector, where spend expanded 26.3% year on year, fuelled by an increase of spending on sun cream and moisturisers.

Accessories and electrical goods posted the biggest year-on-year increase, up 69.9% and 27.9% respectively from the previous year. Alcohol posted the biggest change, with monthly spend declining 17.4%, with a 6.5% year-on-year fall.

Mike Petevinos, head of consulting for retail for Capgemini UK, said the recession was a clear factor in the change in consumer behavior, with online shoppers looking to trim spending.

Tina Spooner, director of information at IMRG, said: "Almost any business would be delighted with an 8% growth in the current market conditions, so while this is a poor performance in internet shopping terms, actually it is very positive compared to high street sales, which rose just 0.8% in May."

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