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Although the U.S. Department of Commerce reports online sales rose 14% in the second quarter over the same period a year ago, Internet measurement firm comScore Inc. warns that growth may slow down without more online spending by middle-income shoppers.
Online retail sales grew 14.0% in the second quarter over the same period a year earlier, the U.S. Commerce Department says, marking the third straight three-month period of at least 14% growth following a year-long slump during the recession. But comScore Inc., which tracks the spending of online shoppers, says growth may slow unless middle-income shoppers start buying more online.
The Commerce Department reported that seasonally adjusted e-commerce spending during the second quarter reached $39.7 billion, up 2.6% from the first quarter. The 14.0% year-over-year growth rate in Q2 follows 14.3% growth in the first quarter and 14.6% growth in the fourth quarter of 2009.
Total retail sales in the second quarter grew 7.5% from a year ago to $971.4 billion, making e-commerce sales 4.1% of the total, the Commerce Department said. However, after excluding sales in categories not commonly bought online—automobiles, fuel, grocery and restaurant sales—Internet Retailer calculates e-commerce accounted for 7.3% of retail sales in categories where web retailers typically compete with bricks-and-mortar stores, down slightly 7.9% from in the first quarter.
Without the seasonal adjustment, the U.S. Census Bureau estimates second quarter e-commerce sales reached $37.2 billion, up 1.5% from the first quarter and 13.7% more than during the second quarter of 2009. Non-adjusted e-commerce sales represented 3.8% of total retail sales in the second quarter. Total non-adjusted retail sales were $988.9 billion, up 10.3% from the first quarter and 7.5% from Q2 of 2009.
The Commerce Department report, which is based on a quarterly survey of 12,000 retailers, followed the release of a lower Q2 estimate from comScore Inc., which tracks a panel of online consumers. ComScore estimated e-commerce spending of $32.9 billion, up 8.9% from its estimate for the second quarter of last year. Gian Fulgoni, comScore chairman, says when comparing comScore data with the same categories tracked by the Commerce Department comScore's growth figure would be about 11%.
Fulgoni says year-to-date online spending has been strong, but expressed caution about the future. "The job market seems to have lost momentum and could lead to weak spending in the third quarter," he says.
He also highlighted the weakness in online spending of middle-income households in July 2010, which was 8% lower than it was in July 2008, before the recession fully took hold. Those households account for 41% of online spending, Fulgoni says.
Growth in July came from low- and high-income shoppers. Online spending for households earning less than $50,000 was up 14% in July versus July 2008, while households earning more than $100,000 increased online spending by 28%.