Inflation crisis! UK online consumption growth drops 25.5%

According to foreign media reports, the total retail sales in the UK increased by 3.1% in March this year , while the increase in March 2021 was 13.9% , a sharp drop in year-on-year growth.

According to IMRG Capgemini in its latest online retail index study , online sales results in March show that consumers' desire to spend online is declining rapidly due to the impact of global inflation . Following the high growth of 57% in March last year , online sales in the UK fell by 25.5% year-on-year.

Compared with 64.7% in March 2021   Compared with the growth in March, online sales of non-food categories fell by 29% in March and fell by 27.3% in the past three months . Except for the continued positive growth in online sales of clothing categories (women's clothing increased by 20% and men's clothing increased by 14%) , other non-food categories performed poorly year-on-year , including a 2% decrease in footwear and a 4.4% decline in household goods and decorations . The online penetration rate of non-food categories fell from 63% in March 2021 to 38.5% in March this year .

Andy Mulcahy, strategy and insight director at IMRG, said the index demonstrated that UK online retail continued to decline sharply in the first quarter of 2022, a reversal of last year’s huge growth.

Sales slowed in March as consumer confidence continued to decline , but consumer spending was still higher than last year, confirming that inflation has led to higher consumption.   .

Lucy Gibbs, head of retail at Capgemini , said that despite the continued decline in sales, the share of the online market in the UK and even the world has been increasing in the two years since the pandemic swept the world , and the lockdown has forced people to change their consumption patterns. However, online retail is currently facing a huge crisis, and the negative impact of global inflation has hit the confidence of consumers and retailers in both directions. The pressure of living costs and record high fuel prices have caused consumers to lose confidence, while the increase in product operating and production costs has reduced retailers' profit margins and even caused them to lose money.

An online seller said that the order volume of its store has dropped by 42% to a new low, indicating that consumers have reduced their consumption categories and are more restrained in their desire to buy . To change this situation, it may be necessary to adjust the functionality and fun of the goods to make consumers feel that they are getting value for money , increase their desire to buy, and thus increase store sales .

U.K.

Online consumption