Online shopping plunges to record low

Online sales in January are never good after the December surge in web purchases, but this year they were particularly bad, according to the latest IMRG Capgemini e-retail sales index.

The annual growth for January sales was five per cent - a record low since the index began tracking - with consumers spending about 4.3 billion online last month.

Chris Webster, vice president of retail consulting and technology at Capgemini, had a theory on the change. "Last January, e-retailers' sales were buoyed up by heavy discounting and promotions that were necessary to sell stock left over from poor Christmas trading resulting from the impact of the recent move into recession," he said.

Others, such as IMRG director of information Tina Spooner, said the increase in VAT and well-stocked retailers without deep promotions or discounts were factors in the decline.

Sales fell by 22 per cent from December 2009 to January 2010, but Spooner added that December was a strong month for sales overall. In fact, 26 and 27 December produced the highest sales numbers for all of 2009.

When it came to particular markets, many sectors saw a steady annual growth with the exception of electricals purchased online. The accessories market was up 127 per cent since last January.