Lockdown restrictions being lifted in the UK has had a noticeable impact on online sales, as there was a 9.1% decline in May compared to the same period last year when there was a significant 61% increase. However, despite the drop, sales volumes are still strong, as there has been a 46% rise compared to May 2019. These findings were reported by the IMRG Capgemini Online Retail Index, which monitors the online sales performance of more than 200 retailers.
Most categories experienced minimal growth, following the substantial gains seen in 2020. However, the fashion sector stood out with a 13.1% increase in sales. This may be attributed to consumers wanting to be prepared for the unpredictable British weather, especially with travel abroad still uncertain due to the ongoing pandemic.
In contrast, footwear sales saw a decline of 7.3% after a surge of 35.8% in the previous month. The Average Basket Volume (ABV), which measures the average value of goods purchased by shoppers, has been steadily increasing and now stands at £130.
Andy Mulcahy, the strategy and insight director at IMRG, emphasized that while there was a significant year-on-year drop in sales, it is important to consider it in the context of the exceptional growth rates witnessed last year. When comparing the monthly growth between April and May, there was a 10-percentage point difference from the same period in 2019. This indicates a slowdown in demand, but it is still coming from a high base. Mulcahy believes that if the final stages of reopening proceed as planned, the trend of decline might continue throughout the summer.
Lucy Gibbs, the managing consultant for Retail Lead at Capgemini, mentioned that the significant drop in May is not surprising considering the unprecedented growth in online sales experienced last year. Multichannel retailers were more impacted by the decline (-13.9%) compared to online-only retailers (-1.34%), as consumers have started returning to physical stores with the reopening of hospitality venues. Budget retailers experienced the largest decrease in sales (-12.8%), followed by mid-market retailers (-6.2%) and premium retailers (+0.2%).
In summary, as the UK gradually eases lockdown restrictions, there has been a decrease in online sales, although sales volumes remain strong. The fashion sector has performed well, potentially due to consumers’ desire to be prepared for the unpredictable British weather. However, with continued easing of restrictions, it is possible that there may be a further decline in demand, especially if the reopening process proceeds as planned.
Useful links:
– BBC Article: UK online sales fall as shops reopen after lockdown
– Retail Insight Network: Online sales in UK decline as lockdown restrictions ease
