Online retail sales growth in May worst on record

Online retail sales growth in May was the worst on record as retailers remain “caught in a perfect storm”.

According to the latest IMRG Capgemini eRetail Sales Index, online retail sales grew just 1.9 per cent year-on-year in May, the lowest level of growth since its records began in 2010.

Electricals saw the sharpest decline during the month diving 27.5 per cent, continuing a downward trend seen since November 2018.

Clothing also struggled, with menswear down 13.3 per cent, and womenswear dropping 4.8 per cent continuing a trend of single-digit or negative growth this year.

Beer, wine and spirit sales also saw the first negative growth for the year, dropping a dramatic 19.7 per cent, while accessories saw the worst growth in a decade dropping 20 per cent.

READ MORE: UK mobile retail spend to double to £33.2 bn by 2024

While online sales as a whole struggled, mobile or m-commerce experienced an 8.4 per cent growth, including a 35 per cent rise in sales via smart phones.

IMRG’s strategy director Andy Mulcahy pointed out due to last May seeing record spending thanks to the Royal Wedding, World Cup and heatwave, it made for tough comparatives.

“That said, 1.9% growth is far lower than we might have expected; indeed, it’s the lowest since we started tracking nearly 20 years ago, so it seems there is something more going on here,” he added.

“The fact is that retailers are caught in a perfect storm at the moment – with all the problems on the high street, changing customer behaviour, shopper confidence low due to all the CVAs and negative coverage of major brands, a shifting competitive landscape, and, of course, even the weather is refusing to provide any relief. It’s proving tough to find any positives in the sales performance at the moment.”

Capgemini’s principal consultant in retail customer engagement Bhavesh Unadkat added: “The Health and Beauty sector is a standout category in a tough month, reporting +22% compared to +2 total vs last year. Wellness and wellbeing have become a high focus area amongst consumers. Therefore, at a time when there is limited disposable spend, this could be impacting other categories such as clothing.”

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