June 21- June 28, 2006 Edition

Times Reports

Internet Retail

Sales Slowing

SAN FRANCISCO, CA/6/17/07–The New York Times June 16 reported that growth in Internet sales has dropped dramatically across a wide range of categories including books, entertainment tickets, office supplies, health and beauty products and computer equipment. After a phenomenal increase of 25% in online commerce growth per year in recent years, last-year growth slowed sharply in major sectors like books, tickets and office supplies, The Times article said.

The article, by Matt Richtel and Bob Tedeschi attributes the slowdown in part to Internet fatigue which is changing consumer buying habits. Sales on the Internet are expected to reach $116 billion this year, or 5 percent of all retail sales.

Forrester Research, a market research company, projects that online book sales will rise 11 percent this year, compared with nearly 40 percent last year, The Times report says. Apparel sales, which increased 61 percent last year, are expected to slow to 21 percent. And sales of pet supplies are on pace to rise 30 percent this year after climbing 81 percent last year.

Growth rates for online sales are slowing down in numerous other segments as well, including appliances, sporting goods, auto parts, computer peripherals, and even music and videos. Forrester says that sales growth is pulling back in 18 of the 24 categories it measures.

Read the entire Times article.