Is e-commerce in a slump? UK online sales fell 12% year-on-year in April

Based on the online sales performance tracking of more than 200 retailers, IMRG Capgemini provides the latest UK online retail index, which shows that online retail sales in the UK fell 12% year-on-year in April . This is a significant improvement compared to the 25.7% year-on-year decline in online retail sales in the UK in March, but it has not yet returned to the pre-epidemic state.

The decline in UK online retail sales in April was also very obvious in the year-on-year weekly data. For example, the growth rate in the fourth week of April 2022 was 10%, while the same period last year was a positive growth of 10%.

As rising supply chain costs affect product prices, inflation leads to an increase in the cost of living , and consumer spending increases, the downward trend in online sales is more obvious. It is understood that the average purchase basket value ( ABV ) of consumers in April was £146, a record high, £3 more than the previous record high in August 2021. There is no sign of slowing inflationary pressures , and consumers' desire to buy is gradually declining .

In terms of purchase categories, electrical appliances and beauty products set new records for online retail sales in 2021 , but have performed poorly in the past few months of 2022 , falling by 17.8% and 27% respectively in April . At the same time , clothing has maintained steady growth in online retail since the epidemic , with a year-on-year increase of 4.2% in April .

Lucy Gibbs, senior manager of Capgemini's retail insights department , said that although online sales in categories such as home, gardening , health and beauty experienced negative growth in April , they still exceeded expectations. The growth of the clothing category was in line with expectations . The decline in sales due to the closure of physical stores during the epidemic led to growth on online platforms, surpassing other products to become one of the categories that consumers pay the most attention to and consume the most frequently .

Online sales have grown significantly in the two years since the epidemic , but industry insiders predict that with the easing of the epidemic and spending pressure caused by inflation, the development of e-commerce in the UK will fall into a slump this year.

However, survey data show that the proportion of British consumers who have shopped online in the past year has reached 83% . Even if inflation leads to a decline in purchasing power, the penetration rate of e-commerce is expected to continue to grow in the UK in the next few years , reaching 90%.

U.K.

Online Retail

clothing