Data: Sharpest online sales fall on record as restrictions ease

No comments

Online sales recorded their biggest drop in volume ever last month, though online spending remains significantly higher than pre-pandemic levels.

Online retail sales dipped 9.1% year on year in May, a stark decrease from 61% growth reported for the same period last year, according to the IMRG Capgemini Retail Index. The figures recorded in May were far below the three-, six- and 12-month rolling averages of 25%, 44% and 47% respectively.

Despite this, last month’s volumes remained 46% higher than sales recorded in May 2019.

Clothing escaped the downward trend, with online sales rising 13.1% year on year. Demand for beer and wine also increased 7.5% compared to May 2020.

Categories that previously experienced high levels of growth online throughout the pandemic showed a slowdown in sales last month as in-person shopping remained a possibility. Health and beauty was the most affected, with sales plummeting 29.2% year on year, while home and garden sales dropped 9.4%.

Sales of electricals declined by 6% in May compared with the same period last year.

Footwear experienced a slump in sales following last month’s strong growth of 35%, with sales online for May down 7.3% year on year.

IMRG strategy and insight director Alan Mulcahy said: “While the -9.1% year-on-year drop is technically the biggest in the 21-year history of the index, it can be misleading as it is compared against a huge growth rate last year. There is definitely a slowing down in demand, though from a very high base.

“Things are changing fast: the high street reopened in April, then further easing of restrictions in May brought more spending opportunities. Then, in June, all restrictions may be removed, with people likely to use backed-up holidays in July and August to an even greater extent than normal, so online should be impacted by that. If all goes according to plan there, summer could see this trend of decline in online volume continue.”

Capgemini retail lead for analytics and AI Lucy Gibbs said: “A significant drop in year-on-year performance in May is not surprising against last year’s heights of online growth. This was accentuated for multichannel retailers (-13.9%) compared to online-only (-1.34%) as hospitality has started to open up this month and consumers returned to the shops. Budget retailers also saw the largest swings, down -12.8%, compared to mid-market (-6.2%) and premium retailers (+0.2%).”