UK retailer expects all sales to be online

Shop Direct, the ecommerce group behind very. co. uk and Littlewoods, has predicted that every transaction via its sites will involve a mobile device from next year, after online sales boosted Christmas trading.

Sales at the retail group rose five per cent year- on- year in the six weeks to December 27, as online shopping continued totakemarket share fromhighstreet and mail order retailers. Mobile devices accounted for about 36 per cent of these sales.

Shop Direct, which has evolved swiftly from a catalogue retailer to a predominantly online operation, now derives about 85 per cent of its sales from the internet.

However, Alex Baldock, chief executive, said that this was just the beginning. He forecast that, in 2015 "every transaction" would involve a mobile device at some point — with customers checking out an item on their tablet first or completing the transaction on a smartphone.

"Customer behaviour is changing very, very fast," Baldock argued. "There is very little downtime in customers’ lives. If they are waiting on a train, they will use it to research or complete a transaction."

Shop Direct, which is owned by the Barclay brothers, whose other businesses include the Ritz hotel and Telegraph Media Group, returned to profit for the first time in a decade last year. Growth in the group was led by brands such as very. co. uk and isme. com, which posted combined sales growth of 27 per cent.

Very. co. uk now has an annual turnover of about £ 700 million ( Dh4.2 billion), lifting the online business to the same level as rival retailer Asos, which had annual turnover of 760 million last year. "There are not too many 700 million turnover businesses that are growing at 20 per cent per year," said Baldock.

Shop Direct’s older brands division, which includes Littlewoods and K& Co, suffered a sales drop of five per cent. But the company said the management had been able tomaintain the division’s profitability.

Baldock said that overall UK consumer spending was unlikely to rise soon, despite macroeconomic growth figures indicating a healthy pick- up in the British economy.

"We are not counting on an improvement in the environment," he said. "Household budgets remain tight and the cost of living is increasing faster than their incomes."

Shop Direct said its consumer finance arm had helped to overcome the effect of stagnant wages and benefit cuts on its predominantly lower- income customers, by allowing them to buy on credit.

"That model comes into its own at Christmas," said Baldock. "We are a responsible lender — we don’t lend to people who can’t pay it back."

(News courtesy : Financial Times)