UK's online retail sales fell 12% YoY, lowest since March: IMRG

Growth online for the Black Friday week turned out to be flat, which was a bit better than expected and was out of sync with the low demand of the previous 10 months. However, this turned out to be due to volume being pulled forward, as was evident from the week following it, according to the IMRG Online Retail Index, which tracks online sales for 200 retailers.

Sales for week commencing on November 27 fell -7.3 per cent, against a huge decline of -34 per cent for the same week in 2021. The delivery disruption also saw a weak performance for the week starting on December 18, as final delivery dates shifted earlier, with sales down -4.7 per cent, and unable to build on the -22.4 per cent decline for the same period last year.

Clothing was the single main category to achieve positive growth for 2022 as a whole, at +2.5 per cent YoY. The problem for online retail is clear to see—the average basket value increased from £121 in 2021 to £134 in 2022, driven up by inflation and other factors as products become more expensive for people to buy. The logical consequence being that the conversion rate (percentage of site visitors who complete a purchase) was at times in 2022 20 per cent lower than at the same times in 2021, added the IMRG.

Andy Mulcahy, strategy and insight director at IMRG, said: “Retail is a confidence game; if people feel they are comfortable with their finances and have some disposable income to play with every month, then retailers tend to see that reflected in general patterns of demand. Mid-2022, we revised our forecast range, making a decline of -10 per cent the lowest estimate in our modelling, which is where 2023 came in.

“So, it really has been a poor year. The bright spot, however, is that traffic to retail sites has continued to grow even after the huge surges from the pandemic, so once the general economic malaise eases, retailers should be in a good place to benefit from the fact that people still like browsing and shopping for products. The issue is that many are expecting another tough year in 2023, with the first half, in particular, unlikely to provide much respite.”

Fibre2Fashion News Desk (NB)