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Online shopping surges - department store sales slump

Online shopping has surged in the run-up to Christmas, netting its highest share of overall spending, but department store sales have slumped to a record low, according to the Office for National Statistics.

The value of goods bought on the internet rose to a weekly average of £220m last month and accounted for 3.8% of all sales, compared with 2.8% in June.

Statisticians warned that web sales were highly seasonal and their share dropped after Christmas. They added that "click and collect" sales, where someone reserves something online to pick up in the store, counted as web sales in the data. The ONS said overall sales rose unexpectedly in November thanks to the popularity of games consoles. But department store sales were at their lowest level since the figures were first collected in 1986 and the overall annual growth rate was the weakest since early 2006, highlighting the underlying trend of slowing sales.

Retail sales volume grew 0.3% in November, a first rise in three months, which defied expectations of a sharp fall, but October's 0.1% drop was revised to a 0.3% fall. Food sales were 0.2% higher last month, but clothing and footwear fell 0.1% and department store sales by 1.5% in spite of heavy discounting.

The market research group Experian said shopper numbers were down 11.2% on Monday, Tuesday and Wednesday this week compared with the corresponding days last year. "Given the economic situation, we expect consumers will not be shopping with the gusto witnessed in previous years," Experian said. Shopper numbers were down 9.1% last weekend.

Analysts cast some doubt on the official sales figures. David Buik at BGC Partners called them "nebulous and meaningless". He said: "It's all about how much money passes into the till and not about whether sales have increased or decreased. No one has gone around in the past two months with their eyes shut. Discounts between 20% and 50% have been commonplace and that will strike a chord with many of us, which means no profits have been made and almost certainly losses in places have been recorded by the retailers."

Peter Mandelson, the business secretary, said retailers could not rely on the government to bail them out in tough times. He said companies such as Woolworths - whose 807 stores are closing by 5 January - must change to survive.

"Of course, with the emergence of very many more ... competitive retail outlets, older established names are going to come under pressure," he told Sky News. "Now they have to change, restructure and keep up ... if they are going to survive."

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