 The growth rate of online retailing fell to its lowest level on record in May, according to the latest figures from the IMRG Capgemini e-Retail Sales Index. The index shows online sales growth of 8.2 per cent, compared to 30.9 per cent in May 2008. The slower growth is attributed to recessionary
effects and sunny weather, which kept people away from their computers. Despite the slowdown, online sales still reached £3.7bn in May.
 “Although online sales remain healthier than the high street, UK shoppers are clearly changing their behaviour as a result of the recession, even those heading online to economise are now beginning to trim spending habits,” says Capgemini head of consulting for retail Mike Petevinos. “While the underlying trend is still one of growth for online retail, the market conditions are placing all retailers under intense pressure to ensure their offerings remain competitive.”
“Almost any business would be delighted with an 8 per cent 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 per cent in May,” says IMRG director of information Tina Spooner.
In contrast, new figures from the Internet Advertising Bureau and PricewaterhouseCoopers reveal that online advertising spend in Europe grew by 20% in 2008, reaching £11bn. A report revealed a 26% increase in online search spending last year, compared with 2007. Online classified spend increased by 17.4%, display advertising grew 15.1% and email was up 12.2%. The top ten countries accounted for 93% of the total European online advertising market, however six of these countries, including the UK, experienced growth of less than 20%, the report found.
Image: online shopping
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