E-commerce accounts for 15% of UK retail sales in November
December 18, 2015 09:26 AM
(Bloomberg)—U.K. retail sales rose more than economists forecast in November as Black Friday discounts boosted department stores and spending on household goods, and e-commerce accounted for its largest share of the pie yet.
Online sales made up 15.2% of total sales in November, the highest share since records began in January 2008, according to the Office for National Statistics. This year, consumers spent 1.1 billion pounds ($1.64 billion) on Black Friday, up 35.8% from 810 million pounds in the same period a year ago, according to data from IMRG and web measurement firm Experian.
November’s total retail sales volumes increased 1.7% from October, when they fell 0.5%, the ONS said in London on Thursday. Economists in a Bloomberg survey predicted a 0.6%t gain. Excluding auto fuel, sales also gained 1.7%.
The statistics office carried out its data collection Nov. 1-28 and therefore Thursday’s report doesn’t include Cyber Monday, the Monday after Thanksgiving in the U.S., normally a big day for Internet sales.
And when Britons do shop online, they increasingly turn to Amazon.com Inc., No. 1 in the Internet Retailer 2015 Europe 500. A BloomReach survey of 1,000 U.K. consumers on holiday shopping behavior finds that 90% of them will consult Amazon on their gift purchases this year, using it as a search engine and gift idea generator: About 43% named Amazon as the starting point when they knew what they wanted to get a person, and 41% said they turned to the online retailer as the starting point when they didn’t have a gift idea.
Amazon also ranks highly for comparison shopping. 46% of U.K. consumers will comparison-shop on Amazon for about half of their holiday purchases, and 80% of those surveyed will buy from Amazon, BloomReach says.
Price cuts in the week leading up to Black Friday on Nov. 27, which has become a shopping event in the United Kingdom in recent years, helped lure shoppers. Sales at department stores rose 3.4%—the biggest monthly gain in almost two years—and household goods jumped 4.1%. Food sales rose just 0.8%.
The figures underline the extent to which growth is being driven by domestic spending as the global slowdown weighs on manufacturing and exports. That’s in part due to the boost to real incomes from near-zero inflation. Retail prices excluding auto fuel, measured by the annual deflator, dropped 2.3% in November, the most since 2002.
The Bank of England held its benchmark interest rate at a record-low 0.5% this month and officials have indicated they are in no hurry to follow the Federal Reserve, which raised the key U.S. rate for the first time in almost a decade on Wednesday.
“Consumers are unlikely to face the burden of a rise in interest rates until the end of 2016 at the earliest,” said Martin Beck, senior economic adviser to the EY ITEM Club. “In the long term, rising inflation and cuts to the welfare budget will act as headwinds, but retailing should continue to be one of the bright spots of the U.K. economy.”
Sales rose 5% from a year earlier, and by 3.9%t when fuel is excluded. Total sales are set to contribute to growth in the fourth quarter, with volumes up 2.1% in the three months through November and by 5.3% from a year earlier, close to the strongest annual growth in 11 years.