Online sales growth slumps to ‘lowest ever’ July level

Month-on-month sales spiralled down 5.7%. The performance was below three-, six- and 12-month rolling growth averages of 4.9%, 4.9% and 6.5% respectively, online retail organisation IMRG and Capgemini’s eRetail Sales Index revealed.

The disappointing performance followed hopes that an improvement in sales in June would be sustained and that warm weather and the Prime Day promotion by Amazon – which does not report sales to the IMRG survey – would have boosted sales across online generally.

Growth in menswear, which delivered a 31.2% sales advance in June, retreated to 10.4%. Accessories and womenswear were down 13.3% and 8.7% respectively, and womenswear’s average basket size slid by a third year on year.

Despite the weather, including the hottest day of the year, beers, wines and spirits and garden and home were both down year on year – though the men’s football World Cup had boosted performance in the former category in 2018.

IMRG strategy and insight director Andy Mulcahy said: “Online sales growth had been subdued throughout the first half of 2019, but in June there seemed to be a bit of a bounceback that hinted toward growth picking up again.

“However, there is now evidence that the June performance was artificially inflated by heavy discounting to stimulate sales, and it seems likely that some of that volume was pulled forward from July.

“There is usually a dip between June and July, but this year it was sharper than the five-year average of -1.1%. The clearest indication came from clothing, which recorded its strongest growth in over a year in June [+15.7%], but the average basket value was down around 25%, suggesting that the rise was driven by discounting.”

Capgemini principal consultant in retail customer engagement Bhavesh Unadkat said: “The outlook remains uncertain for retailers into half two as consumer spending is cautious and confidence low, yet GfK has reported that the major purchase index has increased six points back into positive territory this month.

“This could hint that customers will be more willing to make considered purchases over the coming months rather than impulse buys. As we lead into the peak season retailers will, therefore, need to focus on winning share of wallet among an increasingly competitive online market.”