Report: US e-commerce sales rose 4.1% in Q1
U.S. e-commerce sales in the first quarter (adjusted for seasonal variation, but not for price changes) rose 4.1% from the fourth quarter last year to $105.7 billion, according to a report released Tuesday by the U.S. Department of Commerce. That compares to an increase in total retail sales of just 1% in the same period, according to the report.
Year over year, Q1 e-commerce sales rose 14.7%, while total retail sales rose 5.1% in the same period. E-commerce sales in the first quarter accounted for 8.5% of total sales, the Commerce Department said.
On a not-adjusted basis, Q1 U.S. retail e-commerce sales fell 20% to $98.1 billion, from the fourth quarter last year. Year over year, Q1 digital sales rose 14.8%, while total retail sales rose 3.7% in the same period. On that basis, e-commerce sales in the first quarter accounted for 8.4% of total sales, according to the report.
Analysts are increasingly taking into account the damage that the shift to e-commerce is inflicting on retailers’ margins. In addition to tepid sales overall, “the shift to the variable-cost model of e-commerce from the fixed-cost store model continues to suppress operating margins for the sector,” Moody’s Investors Services retail analysts said in a report on U.S. department stores emailed to Retail Dive on Tuesday.
It’s noteworthy that, despite its robust growth, e-commerce still only accounts for “well below 10% of the huge overall retail market,” which has been growing at the “same healthy 4% [or so] annual rate we have seen over the last 30 years,” according to retail analyst Nick Egelanian, president of retail development consultants SiteWorks International. Plus, “when shipping costs are fully allocated to the consumer some time in the future, we will see the rate of internet sales growth sharply decline,” he said in an email to Retail Dive.
“We believe that there is mounting anecdotal evidence that a large percentage of e-commerce are actually additive to overall retail sales, as opposed to coming directly from brick and mortar stores,” he said. “Looking deeper into these numbers, we note [for example] that the ‘wholesale’ pure retail portion of Amazon's overall business accounts for only about 1% of total retail sales and is not a significant driver of the brick and mortar consolidation we are now seeing.”
- U.S. Department of Commerce, Census Bureau QUARTERLY RETAIL E-COMMERCE SALES 1st QUARTER 2017
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