Internet sales spurt 28% in quarter, to $15.5 billion

Online commerce in U.S. rises to 1.9% of retail total

May 22, 2004|By BLOOMBERG NEWS

WASHINGTON - U.S. Internet purchases in the first quarter rose to $15.5 billion, a 28 percent jump from the corresponding three months last year, the Commerce Department reported yesterday.

Total retail sales in the first three months of the year were $834.8 billion, 8.8 percent higher than a year earlier.

"As consumers become more comfortable with the channel, they are more willing to make the purchase and they are more willing to buy from categories they wouldn't have in the past," said Ken Cassar, director of strategic analysis at Nielsen//NetRatings Inc., in Milpitas, Calif. "As the economy improves, as the labor market improves, it will have a positive effect online."

Online commerce accounted for 1.9 percent of all retail sales compared with 1.6 percent in the first quarter of 2003. The percentage gain in Internet sales year over year was the most since a 30 percent jump in the fourth quarter of 2002.

Retailers are trying to encourage purchases over the Internet by offering music to download and merchandise not offered in their stores.

"Our catalog and Internet businesses are clearly resonating with our customers," Vanessa Castagna, chief executive of J.C. Penney Co.'s department stores business, said in an interview this week.

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