Online sales volumes saw largest drop in history last month

Online retail sales saw their largest drop in volumes ever recorded last month, falling nearly 10 per cent as consumer confidence returns to pre-lockdown levels.

UK online retail sales fell by 9.1 per cent in May compared to the same period a year earlier, when they skyrocketed 61 per cent.

According to the IMRG Capgemini Online Retail Index this is the largest decline in sales volumes on record, falling well below the three-month, six-month and 12-month average growth rates of 25.2, 44.3 and 47 per cent respectively.

While the majority of categories saw little or no growth, with areas such as health and beauty dropping 29.2 per cent, IMRG’s strategy and insight director Andy Mulcahy said the figures were largely down to very strong comparisons in 2020.

READ MORE: Online retail sales continues impressive growth of 70% in March

“While the -9.1 per cent year-on-year (YoY) 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,” he explained.

“The monthly growth between April and May is more revealing; when comparing the same period in 2019 (i.e., a normal year) there is a 10-percentage point difference this year, which also happened between March and April. So, there is definitely a slowing down in demand, though from a very high base.”

Compared to May 2019 last months figures represent a 46 per cent increase in sales volumes, while average basket sizes have risen gradually throughout the year to £130.

Capgemini’s retail lead for analytics and AI Lucy Gibbs added: “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 per cent) compared to online only (-1.34 per cent) 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 per cent, compared to mid-market (-6.2 per cent) and premium retailers (+0.2 per cent).

“Consumer confidence has recovered to pre-lockdown levels in May as hospitality venues open up which is good news for retailers, however this, combined with the arrival of warmer weather in June may see online performance against last year continue to swing to the negative for the next month or so.”

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