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Is the slowing in the growth of online sales indicative of a change in consumer’s sentiments towards the internet?

A recent survey from IMRG Capgemini has shown that the e-Retail Sales Index has recorded the lowest annual growth rates in the history of the Index. Like-for-like growth rose by only 5% from January 2009 to January 2010. UK shoppers spent a total of £4.3 billion online in the month. Most retailers experienced strong sales in December 2009, enabling them to mitigate the need to heavily discount; this though had the ultimate consequence of creating weaker annual growth for January.

It does seem that a range of factors have likely led to this consumer reaction. The change in the VAT rate probably influenced many consumers to pair back on their spending in January, certainly for big tickets items. Additionally, a weaker than expected UK economy undoubtedly has affected many peoples confidence, as they consider their job security for 2010. Combine this with a public who are increasingly aware of the need to save more and reduce credit card debt, erratic and trend busting retail statistics are likely to be continuing feature for some time.

Tags: online shoppping