Biggest online spending slump in half a decade

20 September 2012

online_shopping--Online sales have been pretty steady compared to the high street, but alas, there's been the biggest slump in 5 years, blamed largely on the fact everyone was staying in to watch the Olympics and the Jubilee celebrations, rather than spunk their money on stuff.

Non-store retailing sales volumes fell by 6.7% between July and August, the biggest drop since December 2007, according to the Office for National Statistics (ONS) said.

Samuel Tombs, UK economist at Capital Economics, said the figures "add to the evidence that the Olympics did not provide the hoped-for boost to spending on the high street".

Same went for the European Championships this summer, with fans not buying England shirts and the like.

Tombs added: "With consumer confidence still very weak and inflation set to outpace earnings growth for another six months or so, we would not be surprised to see further falls in retail sales in the coming months."

What isn't helping is that economists have warned that inflation isn't going to fall as quickly as first hoped, meaning that people are a little jumpy when it comes to trying to spend their way out of recession. Not good news for the retailers at all.

The rate of inflation slowed to 2.5% in August, while the average wage only rose by 1.4% in the same period. Add to this, rising fuel costs, utility bill hikes and higher tuition fees and you see the problems customers are facing when it comes to parting with their cash.

TOPICS:   High Street News   Supermarket   Economy

4 comments

  • Mustapha S.
    Make stuff cheaper to buy, less greedy shareholders and I guarantee sales will shoot back up. Except I doubt anyone is gonna do that.
  • Frkstyle
    Lower the bloody vat and we'll see the real improvement.
  • Logan
    @Mustapha - In a ideal world that would be great, but we have an online presence and have lowered our prices to where we make between £2-£10 on a number of our products that cost £100+. If the customer returns this to whatever reason, we have lost money. It's so tight and difficult to get sales at the moment, the customer wants it it cheap and who can blame them. We are now investing in buying stock direct from China and that is helping, quality products that suit the customer in terms of price and build, it's not branded, but look at Aldi, Poundland etc they are going from strength to strength, plus it gives us an extra bit or profit that we struggle to get on our branded UK products. Businesses have overheads remember, utilities, buildings, staff, postage and a host of all other costs that need to be met, so dropping prices too much will put businesses out of business.
  • Zeddy
    "The rate of inflation slowed to 2.5% in August, while the average wage only rose by 1.4% in the same period. Add to this, rising fuel costs, utility bill hikes and higher tuition fees and you see the problems customers are facing when it comes to parting with their cash." What cash have they to part with?

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