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Subdued growth for online retail during March

Lauretta Roberts
24 April 2019

Online retail sales increased by just +5% year-on-year (YoY) as a late Easter pushed back consumers' holiday spending, while online clothing sales were up just +3.7%.

While still positive growth the performance fell significantly below the three-month and 12-month average growth of +7.5% and +7.1% respectively, according to the IMRG Capgemini eRetail Sales Index.

The figures also compare to last March when the country was in the grip of the "Beast from the East" snow storms, which boosted online sales as consumers shopped from home instead of heading out to the shops.

Across the sectors the impact of a late Easter was most apparent in Home and Garden, which saw its impressive growth trajectory from earlier in the year slow to just +1.6% YoY. Meanwhile despite a strong performance in Footwear (+16.7%), the Clothing sector continued its five-month run of single digit growth (+3.7%), and both Electricals and Gifts saw sales plummet by -26% and -22.1% respectively.

In contrast Health and Beauty had yet another strong month of sales (+15.6% YoY), with Beauty outperforming the rest of the sectors with a +19.8% increase – which IMRG Capgemini said could be due to a few celebrity beauty line launches last month.

Andy Mulcahy, strategy and insight director, IMRG explained: “While on the surface of it +5% growth may not seem very positive, there are actually two possible interpretations. On the one hand it looks bad as it’s below the 3-, 6- and 12-month rolling averages of +7.5%, +7.1% and +10.2% respectively; it’s also the lowest of the first quarter of 2019.

"On the other hand, this growth is against a strong base from March 2018, which featured Easter (home and garden online sales were down -15% in the equivalent week in March this year) and freezing temperatures that kept people away from high streets and boosted online sales in 2018.

“As Easter falls in April this year, the growth rate for that month will determine whether March’s performance can be considered good, bad or indifferent given those factors – not to mention the continuing general macro-economic pressures on retail.”

Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini said the performance of clothing was a concern. “March 19 growth at 5% may seem slow but we were up against a very strong March 18. More concerning is the overall position of clothing – which continued its five-month run of single digit growth (+3.7% for March 19).

"Many of the larger, often reliably robust, retailers also recorded low single-digit growth. Closing out Q1, Clothing now stands at 2.6% growth, significantly lower than last year’s 13.9% growth.  This performance is a mix of supply outweighing demand, continued discounting and customers being cautious with spending."

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