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UK online retail sales growth slows amid general election uncertainty

Lauretta Roberts
18 May 2017

UK online retail sales grew 13.9% year on year in April, but while on the face of it that looks like strong growth, it was slower than expected and only up 4.3% on the previous month, according to the newly released IMRG Capgemini e-Retail Sales Index.

The index points out that with Easter falling in April this year (as opposed to March last year), a higher rate of growth might have been expected and a key factor in the slower than expected growth could be Prime Minister Theresa May's calling of snap general election for June. Data for previous election years shows a clear dip in sales of clothing and footwear in the month leading up to the vote.

IMRG Capgemini

Clothing and footwear sales in election and non-election years

During April clothing sales grew 10.5% – which again appears to be solid growth, but it tracks below recent performance and both menswear and womenswear experienced negative growth; at -7% and -5% respectively.

"A year-on-year growth of just 13.9% in a month that also included Easter is yet another sign of slowdown within the retail industry. This is also demonstrated in the month-on-month increase of only 4.3% – again, despite the falling of Easter – where April is always a strong month. The slowdown is further proved through investigating the clothing sector, which increased 10.5% on the year, but showed the slowest year-on-year April growth rate for six years," explained Bhavesh Unadkat, principle consultant in retail customer engagement design, Capgemini.

IMRG managing director Julian Opie admitted it may seem "odd" to be disappointed by a 13.9% sales growth but when other factors were taken into consideration, there was evidence that the suppressed growth was linked to falling consumer confidence. He also warned that confidence would continue to be affected through the forthcoming Brexit negotiation after the election.

"Looking at historical data, it seems that elections exert an influence on spending patterns and we may expect that to continue into May due to the uncertainty that comes with these events. We then enter the period of official Brexit negotiations with the EU, when the progress of those discussions will likely be reflected in shopper behaviour. That could be a period of considerable turbulence for retailers due to the potential for currency fluctuations, shifting shopper confidence and rising inflation," Opie said.

The IMRG Capgemini Index was started in April 2000 and tracks 'online sales', which it defines as 'transactions completed fully, including payment, via interactive channels' from any location, including in-store. More than 100 e-retailers regularly contribute data to the index.

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