Online spending in the UK in April increased 1.5% year on year to £8.1bn, but spending growth has slowed for the third consecutive month.
According to Adobe Analytics, year-on-year growth in online spending has continued for the sixth consecutive month, although growth has slowed every month since February.
Buy Now Pay Later (BNPL) services were flat in April for the first time, as usage had previously risen year on year every month since January 2023 when Adobe first started tracking the service.
BNPL accounted for 16.1% of total spending in April 2024.
Adobe’s analysis of online transactions in April identified a 9.8% year-on-year increase in grocery prices, which is likely to have contributed to overall slowdown in spending growth as well as supermarkets reporting a return to in-store grocery shopping.
However, prices continued to fall across non-essential retailers online. The biggest price drops were seen across electronics (11.7%), apparel (10%) and appliances (5.5%).
Adobe added that price drops could be partly driven by retailers trying to compete with new entrants in the market and low prices from Temu, Shein and AliExpress.
Online spending saw a sharper increase in the last week of April at 3.4% higher than the same period the year before. This may continue into May as shoppers start to see the perks of the rises in living wage and universal credit payments, and national insurance cuts.
Adobe digital insights lead analyst Vivek Pandya said: “While this period of sustained growth in online spending gives some respite for retailers who have struggled over the past two years, the sluggish pace of growth and continued high levels of inflation in essential items shows the sector is not out of the woods yet.
“Retailers will be hoping that the acceleration in spending in the last week of April will carry forward as we approach the summer months.”
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