UK online retail sales were up +9.5 per cent year-on-year (YoY) in June, according to the latest figures from the IMRG Capgemini e-Retail Sales Index. This was the second-lowest June growth rate for the Index since 2001 (only time it has been lower in June was 2014, when it was +9.3 per cent). It was also the first time growth has dipped into single-digit territory since October 2015.
June’s results follow a slowdown in May, which may have been influenced by the snap election in addition to other factors such as rising inflation. Breaking the growth down by weeks of the month, we can trace potential impact of the election (which was on 8 June) on shopping patterns:
The very warm weather in June encouraged people to go out to high streets, with June’s total footfall reported as being up 0.8 per cent up on the same month last year . This may have contributed to a contrast in fortunes for online-only retailers (up +11.7 per cent, but down substantially on +31.4 per cent last year) and multichannel retailers (+8 per cent, same as last year) who may have benefited from use of click and collect orders.
A number of sectors recorded negative growth including electricals (-13.9 per cent), gifts (-8.2 per cent) and accessories (-1.4 per cent). It’s possible that shopper awareness of Amazon’s Prime Day may have suppressed spend in June too as people held back their spend for the July event.
Justin Opie, managing director, IMRG said “Online retailers are facing something of a perfect storm at the moment, having to operate against the backdrop of a continuing wave of political uncertainty, rising inflation, a changing retail calendar (due to impact of major sales days such as Prime Day) and heatwaves. The low growth online during election week (+3.4 per cent) strongly suggests that the election did exert some influence over shopping behaviour as did, arguably, the weather – albeit in a much more ‘omnichannel’ sense. Sales growth for online-only retailers was down almost 200 per cent year-on-year, while for multichannel retailers growth held at the same rate as last year – quite possibly buoyed by the appeal of click and collect orders to provide a bit of certainty for their trips to the high street.”
Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini added, “Despite a relatively flat June overall, the month saw some significant sector specific movements in both directions. Summer sun and celebrations drove beers, wines and spirits to its highest June year-on-year (YOY) growth since 2014. On the other side of the coin, accessories saw its first ever YOY decline since we began tracking it in 2008 – To give you some perspective, its average YOY growth is 48 per cent. This is potentially caused by a fall in consumer confidence given current political and economic challenges, driving down spending on luxuries. Other worthy mentions include electricals, which has had the first June decline since 2003, likely to be caused by the ‘Amazon Prime effect’. In short, a month of ups-and-downs leading to an overall pretty weak June.”