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Online retail sales growth reaches 20-year low

Online retail sales growth hit rock bottom last month, recording its smallest year-on-year growth in 19 year. It was just 1.9% higher than in May 2018, the latest IMRG Capgemini eRetail Sales Index shows

Although total online fashion sales continued to grow – up 8.2% year on year – menswear growth was down 13.3%, and womenswear growth fell 4.8%. Accessories took an even harder hit, and fell 20% year on year – the category’s worst performance in 10 years. The only fashion sub-sector that recorded growth in May was footwear. Online sales rose by 6.7% across the sector.

A “strong” performance in health and beauty resulted in a 22.6% year-on-year increase in online sales. Electrical and gifts categories suffered 27.5% and 18.5% declines respectively.

IMRG strategy and insight director, Andy Mulcahy, said: “May 2018 included the early summer heatwave, the royal wedding and a World Cup looming, and people seemed happy to spend pretty lavishly on retail, so May 2019 was always going to be anchored by it.

“That said, 1.9% growth is far lower than we might have expected – it’s the lowest since we started tracking, so it seems there is something more going on here.

“With all the problems on the high street – changing customer behaviour, shopper confidence low because of all the company voluntary arrangements and negative coverage of major brands, a shifting competitive landscape, and the weather – it’s proving tough to find any positives in the sales performance at the moment.”

Bhavesh Unadkat, principal consultant at Capgemini, added: “When wallet share is being fought over, adapting to customer needs and what is important to them is key. Sectors that differentiate, diversify and better engage shoppers have a greater chance of staying ahead of the game.”

Readers' comments (2)

  • Online is convenient but it’s far from good. It’s artificially aided by how poor and inconsistent service is delivered in physical stores. Losing all those impulse purchase opportunities for a start.

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  • Many brands are not selling their products at anything like the prices quotes on their websites. Some retailers have offers on collections almost all of the year, which is killing any relationship they may have with the wholesale partners.

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