The latest sector report for April suggests that the digital boom in the UK e-tail industry may be coming to an end, as sales struggle to reach pre-pandemic levels. The IMRG Capgemini Online Retail Index released on Tuesday revealed that the sector is facing challenges in attaining the same level of sales as before the pandemic. However, there is a small glimmer of hope in the fashion category, which saw a 4.2% year-on-year growth in April. This growth, while solid, pales in comparison to last year’s massive growth of 51.4% in the same month.
Regrettably, beauty sales have been on a downward trend for several months now, experiencing a 27% year-on-year decline in April. The Index, which monitors over 200 retailers, indicates that there was no overall growth in online sales during the month. The performance in April mirrored that of the same month last year, with both months showing a 12% growth rate.
The weekly results further demonstrate the lack of growth in the industry. In the fourth week of April, there was a decline of 10% compared to a 10% increase in the same week the previous year. This indicates that the industry is still far from achieving pre-pandemic sales levels. Andy Mulcahy, strategy and insight director for IMRG, commented on the findings, stating that after two years of significant online growth, it appears that growth has now reached a plateau.
The report highlights that April is the first month in two years where growth in the Index is not influenced by comparisons to lockdown periods. Despite the ongoing cost of living crisis, the month-on-month growth in April was 3.8%, slightly exceeding expectations. Additionally, the average basket volume (ABV) reached a record high of £146, surpassing the previous pandemic record set in August 2021.
Lucy Gibbs, senior manager at Capgemini, noted that the home and garden, as well as health and beauty categories, are still performing well, despite experiencing negative year-on-year growth in April. Clothing, on the other hand, is on track with expectations, recovering from the losses it incurred during the pandemic.
Overall, the latest report paints a bleak picture for the UK e-tail industry. The digital boom experienced during the pandemic may be dwindling, as online sales struggle to reach pre-pandemic levels. However, there are some bright spots, particularly in the fashion category, which continues to see growth. It remains to be seen if the industry can find new avenues for growth and adapt to the changing consumer landscape.
Useful links:
1. Business Insider – UK e-commerce sales boosted by fall in August 2021
2. Retail Gazette – UK online sales grow by 81% in July
