Media News

US online retail sales may have bottomed-comScore

* Online retail sales may have bottomed after flat Q1

* Consumer spending remains weak-comScore

* Online retail sales outperform traditional retail

SAN FRANCISCO, May 14 (Reuters) - U.S. online retail sales may have hit bottom for the year, but a return to the double-digit growth of past years is unlikely amid the current economic turmoil and uncertainty, comScore said on Thursday.

In a Web seminar focusing on the online economy through 2009's first quarter, the Internet research firm SCOR.O compared zero growth in the first quarter, as reported earlier this month, with a 3 percent dip in the holiday fourth-quarter.

“We’ll see things get better as we go through ‘09,” said Chairman Gian Fulgoni. “But I don’t think we’ll see double-digit growth rates in ‘09, and hope we’ll see growth rates of 5 percent or so in the second half of the year.”

“The good news is I think we bottomed out,” he said. “We’re not seeing a continuation of a trend downward.”

Fears of unemployment, consumers continuing to save and recent higher gas prices are still putting a damper on online retail sales, which nevertheless continue to perform better than sales at brick-and-mortar retailers.

Job security was the top economic concern named by respondents from all income levels who participated in a comScore survey, with mid- to low-income earners equally concerned about prices.

A decline in gasoline prices this fall and winter has now shifted, and gas prices up are 11 percent in April versus March, Fulgoni said.

“That has not gone unnoticed by consumers and is causing a little blip in consumer confidence.”

Also troubling is consumers’ reluctance to spend even if they are able to, Fulgoni said, citing a lack of growth in spending from both the mid-income and upper-income groups.

“Consumers have the disposable income to spend but are choosing to save it,” he said.

Still, flat e-commerce sales fared better than an 8 percent decline in first-quarter retail sales, excluding food, gasoline and motor vehicles.

“Clearly, e-commerce is picking up market share,” Fulgoni said. “If (retailers) can focus on e-commerce, that’s where dollars seem to be shifting in retail.”

He cited recent strong performances from Inc AMZN.O and WMT.N.

Only in consumer electronics was a drop in e-commerce deeper than for traditional retail.

Online shoppers appeared to be gravitating toward sports and fitness products, which saw a 23 percent gain, followed by books and magazines at 19 percent and computer software at a 12 percent gain.

The worst performing category in the quarter was office supplies, which fell 28 percent, and music, movies and videos, which declined 22 percent. (Reporting by Alexandria Sage; Editing by Steve Orlofsky)