Ecommerce sales growth slows to near pre-pandemic levels

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Online sales have been growing at a slow rate in 2023 so far, nearing growth levels seen in 2019.

The rate of online sales growth has increased by an amount that could have been anticipated if there was no pandemic, according to the IMRG online retail Index.

Growth for the total online market in 2019 was up by 5% compared with the year before, but when the first lockdown occurred in 2020 this figure soared by 35%.

However, the sudden increase in online demand was short-lived as growth has been negative each month since April 2021, with the exception of a small growth of less than 1% in November 2022.

In 2022, online sales declined by 10.5% year on year, with the IMRG saying the comparison of non-lockdown against lockdown periods has made it difficult to establish how much has changed.

The value of the index in 2022 compared with 2019 shows the overall market has risen by 17%. This demonstrates an average annual growth rate of 5.7%, which is in line with the pre-pandemic growth level.

Clothing is the only category that hardly recorded any growth during 2020, but it has since grown 25% compared with its 2019 figure. Online sales growth is predicted to decline by 0.3% this year.

IMRG strategy and insight director Andy Mulcahy said: “From an online retail value perspective, we might ask: ‘Pandemic? What pandemic?’ There was a train of thought that suggested existing trends had been accelerated by a decade in the space of a few weeks, but it has become apparent that we are creatures of habit and change simply doesn’t happen at that scale, at that speed.

“It is probably fair to say that the market is a bit better off than might have been expected if there was no pandemic; the rate of growth had been generally coming down over a period of years, so it could have run at lower than 5% per year otherwise.

“The cost-of-living crisis has caused a real shift in shopping behaviour, with conversion on retail sites dropping away markedly throughout 2022.

“If there was no Ukraine conflict, could more of that volume have been retained? We’ll never know, of course, but the impact of the lockdowns on online retail now looks like a historical blip.”