Online retail sales growth slowing down

A new report by Mintel has revealed the UK's online retail boom is slowing down. While the growth rate is very much healthy, it has slowed down annually since 2008, when online sales grew exponentially by 50 percent, compared to 15 percent

in 2012.

Online retail sales growth in the UK slowed for the fourth year running, leaving retailers with a tougher fight to gain market share.

Mintel, an online consumer and market insight group, said the UK's retail sector is still growing up to 14 percent a year and may double in the next five years to 2018. “In a low growth market, double digit growth is nothing to be sniffed at,” said John Mercer, a retail analyst at Mintel.

Only one in 10 retail transactions completed online

Online sales via smartphones and tablets is one of the main growth areas expected over the next five years. Currently less than one in 10 retail transactions are completed online, which Mintel expects to rise to approximately 15 percent by 2018.

As more companies become digitally savvy, online stalwarts such as Amazon and Asos will face greater competition. New services such as “click and collect” are becoming increasingly popular, especially with department stores such as John Lewis, Debenhams and House of Fraser.

Despite the rapid growth of online-only outlets, they still account for less than half of all online sales. Their share of online sales have risen from 40 percent in 2009 to almost half in 2012, but Mintel predicts this shift will slow as high street retailers up their online game, noted the Financial Times.

“Future growth will be the strongest through the store-based retailers,” said Mr Mercer. “We’re seeing store-based retailers receiving stronger rates of growth, partly from a lower base, but also because consumers are moving to click and collect.”

Images: John Lewis collect