- 22 July 2019
- Transport / Logistics Services
UK online retail sales grew by 8.5% between July 2018 and June 2018, according to the newest IMRG Capgemini eRetail Sales Index. This is attributed to the good weather and the start of the sale season. This follows a disappointing May where growth was the worst on record at +1.9%.
Fashion was the leading category in terms of growth, with a rise of 15.7%. Menswear within this category saw 31.2% growth, but womenswear, accessories and footwear held the averages back with relatively slow growth.
Not all categories did so well. Of note amongst all categories was a fall in electrical sales (-23%) and gifts (-23.4%).
Andy Mulcahy, strategy and insight director, IMRG, said: “The trading environment for online retail in the first half of the year has been tough; for the previous three months (March-May), growth was just +2.2%. June then can be interpreted as a bounce-back, particularly given it was building on strong growth of +16.1% in June 2018. However, the discounting has been heavy so the margins achieved may not be high – online clothing sales were up +15.7%, but the average basket value for clothing was down -25%. That doesn’t suggest shopper confidence is very high.
“It is the summer sales period now, so end-of-season sales campaigns are in full swing. The key now for retailers is whether they can come out of discounting and maintain a reasonable level of sales growth before we get too close to the Black Friday period. Otherwise we may be in for another difficult peak where the rates of discount are wider and deeper than many retailers would like.”
Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini, said: “June had a positive sales performance this month, reporting highest YOY growth this year, however it is to be considered with a note of caution; consumer confidence is down 25% vs last year, and the overall performance is masked by weaker comparable in June 2018 and higher discounting activity, indicated by higher conversion rates and lower basket values.
Unadkat continued, “The change of tune in June was also not enough to counter the overall quarter performance, and Q2 reported even slower growth than Q1 (+3.5% vs +7.5%), albeit up against a big Q2 2018. The sectors that where was affected considerably in the second quarter were Garden (-45%), Beer Wine & Spirits (-6%), and Accessories (-11%), partly driven by the weather and bumper events driving positive and impulsive spending last year. Only Clothing has bucked the trend (+11%), with a stronger performance in the second quarter, however the late timing could impact the profits for retailers. The hint of optimism lies with the hope that performance picks up in the second half against weaker comparisons last year.”