Is online retail making a comeback?

The fact that online retail stocks have slumped globally since the highs of the pandemic is no secret.

Whilst lockdowns and store closures brought an ecommerce gold rush,  contrary to many predictions, as restrictions eased and normality resumed, growth started to falter.

Firms that enjoyed significant gains during the pandemic started to slide, with the fast fashion industry becoming one of the hardest to be hit.

It is not just sales but share prices that has been hit over a dire 2022 for most of the online retail sector.

However, could there be light at the end of the tunnel? Charged looked into the share price of the major online players, and while most are substantially down on their 2021 peak, over the past year there has been a rally over the past six months.

Although there reasons behind some big jumps, such as a potential takeover at THG, all the major online retailers have seen a surge on their share prices.

But a run on share price doesn’t paint the full picture. Have sales improved at the big etailers? Charged looks underneath the bonnet.

AO World

Since AO unveiled widening pre-tax losses of £12m for the six months to 30 September, the firm has pushed ahead with a cost-cutting plan, which is paying dividends.

Despite sales declining 17.2% in its third quarter, the electricals retailer has revealed profits will beat expectations at £37.5m to £45m rather than the previous estimate of less than £30m.

The retailer has opted to focus on profitability rather than sales growth, and has sought to reduce costs and improve margins.

This has seen it axe its German business and in-store tie-up with Tesco.


Asos is also still in decline and is turning to cost cutting. The fast fashion giant’sUK sales slipped 8% year on year in the four months into December 31, with the online fashion retailer blaming “weak consumer sentiment”.

It has implemented a £300 million package of “cost mitigation measures” as it battles raging inflation and dwindling consumer demand.


Deliveroo told its investors in March 2022 that it will remain unprofitable until at least mid-2023, as the firm struggled with falling orders and slowing growth.

Despite the grim economic outlook, company CEO and founder Will Shu said he was “confident in our ability to adapt financially to a rapidly changing macroeconomic environment”.

At the beginning of the year, the food delivery giant said it achieved breakeven in adjusted earnings in the second half, boosting its margin for the year to a better-than-expected -1%.

Gross transaction value (GTV) increased by 6% to £1.8 billion in Q4, as item price inflation offset a 2% fall in order numbers, with Shu saying his company had delivered “significant improvements in profitability whilst also still delivering growth in a difficult macroeconomic environment”.


Sosandar has remained resilient over the past year.

Its sales surged 72% to £21 million over the first half of its 2023 financial year, with the growth equally shared between their own website and third-party retailers they work with.

The online fashion retailer also achieved their first year of profitabilty, with a profit of at least £1.6 million in the year to March 31, up from the loss of 600,000 pounds the year prior

During that same period, they made £42.5 million in sales, compared to £29.5 million the year before.


Boohoo’s sales slumped in 2022, as it blamed strong year-on-year comparatives and extended international delivery times.

The fast fashion retailer posted an 11% revenue drop to £637.7 million in the three months to 31 December, its last reported quarter.

UK revenues declined by 11% year-on-year, but fell further in the US, down 17% to £129 million while international sales dropped 10% year-on-year.

Boohoo said its adjusted EBITDA is expected to be in line with market expectations in the year ending 28 February 2023. However, revenues are forecast to decline by around 12% in the period, slightly behind the downgraded guidance for a 10% drop it gave in September.

Analysts believe the firm will not reach profitability until 2025.

However, the fast fashion firm unveiled a plan to boost its market capitalisation seven-fold over the next five years in February.

N Brown

Online fashion retailer N Brown started the year in a positive position, after receiving investment in November from Mike Ashley’s Fraser’s Group.

Since then however it has dipped nearly 60%, partly due to the fact it was saddled with £49.5m bill after settling a legal dispute with Allianz Insurance after customers were missold payment protection insurance (PPI).

After satisfying the settlement, the company has said it will retain a “strong unsecured net cash position with material additional liquidity facilities remaining undrawn.”

N Brown’s sales fell 7.6% to £249.2 million in the 18 weeks to the 31 December, it’s last update. Despite a tougher trading environment, it said performance over the period was “solid” and in line with Q2 trends and management expectations.


Online grocery firm, Ocado has had a turbulent 24 months, enjoying gains from shifting consumer attitudes towards online grocery shopping and then suffering from the retreat back to bricks-and-mortar grocers.

The online grocer posted a £501m loss in its full year to November 27, up from £177 million the year before and worse than analyst forecasts of a £399m loss.

Retail sales fell 3.8% to £2.2bn in what the group called a “challenging market”.

However, sales edged up 3.4% for the online supermarket to £583.7m in the 13 weeks to 26 February as it said it was “on track to restore sales momentum”.


Matt Moulding’s THG has probably endured a harder period than most firms listed on the LSE, since its launch it has watched its market cap fall from £5.4bn to £1.2bn.

Its price has recovered from its January peak of 66p, reaching 82p, this could be a direct result of the interest in the business from private equity firms such as Apollo and the news that Moulding is set to give up his golden share and take the company private again.

In its full year results announced last month, sales were up 2.7% to £2.24bn at the online retail group, however, operating losses climbed to almost £500m from £137.5m last year.

So, after a dire 2022, is online retail edging back into growth?

IMRG’s Andy Mulcahy was not overly positive about the state of play in ecommerce.

“It’s a complex picture at the moment. Following the pandemic boom, we’ve actually seen 22 consecutive months of declining growth for ecommerce, barring November 2022 which was flat.”

“Retailers across categories are reporting strong demand for their coronation ranges, so that might be helping improve performance at the moment, which, to be clear, is still negative but only -1.9% for week commencing 9th April, which is a bit closer to positive than we have been seeing.”

Logistics firm Pro Carrier’s managing director Guy Fischer says: “While the growth of ecommerce is likely to continue, there are also factors such as increased competition and potential regulatory challenges, which could impact the growth of ecommerce companies.”

Retail technology publisher and consultant Miya Knights was also cautious about the state play.

“These fluctuations in share price reflects the market’s caution when it comes to digital-only players because many invested to meet pandemic demand, which has now slowed,” she tells Charged.

“I’ve said over and again that digital gains were unlikely to continue at a rate anywhere near the 20% year on year we saw during the pandemic.

“So, pureplay, digital-only players investing heavily to meet demand were left exposed as stores reopened and consumer spending has rebalanced between stores and online.

“At the same time, we cannot expect to put the genie back in the bottle: online is now responsible for over 20% of total UK retail sales.

“So, those pureplays that have been able to rightsize Capex and Opex post-pandemic, such as Boohoo, ASOS, THG and Deliveroo, are seeing their share prices recovering, as the market regains confidence in their ability to trade profitability.”

Online retailers might not be on the road to soaring growth but its heartening to see that their efforts to improve their balance sheets has impressed investors.



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