×

H1 e-tail growth slows in UK, but fashion stays positive

Published
today Jul 29, 2019
Reading time
access_time 2 minutes
Share
Download
Download the article
Print
Click here to print
Text size
aA+ aA-

Online retail  in Britain was relatively weak in the first half of the year, a report showed on Monday, and even a mini boom during June couldn't rescue it. That's according to the six-month IMRG Capgemini eRetail Sales Index, which tracks the online sales performance of over 200 retailers with a combined annual spend of £28bn.


Online sales growth has slowed this year



Its records show that sales slumped to their lowest ever growth rate of just 5.4% year-on-year. That's compared to 16.9% growth in the first half of 2018.

But what exactly is the reason? H1 2018 had various sales-boosting events such as a long heatwave, a royal wedding and the World Cup. But it also had the ‘beast from the east’ heavy snowstorms that suppressed sales. That bad weather wasn't repeated this year, although a wet May and mixed June weather did dent summer season sales.

Both periods have something in common, facing consumer caution due to fears over the economy and particularly Brexit. But there's no getting away from the fact that online retail in the UK is one of the biggest markets, proportionately, in the world. The fact that the market is relatively mature compared to most other countries indicates that growth is likely to be slower in the future.

Looking at specific categories during the first half, lingerie fell as much as 8.9%, although this wasn’t as bad as a 22.8% plunge for gifts. And growth was lower for multichannel retailers than for online-only (+5.2% vs. +7.4%).

While the slowdown in growth was also reflected across the product sectors, the performances varied widely with health & beauty up 13%, home & garden up 9.3%, and clothing up 7.3%. These three categories saw the strongest growth, with clothing in particular having a substantially better Q2 (+11.2% YoY) than Q1 (+2.6% YoY), due to the hotter weather and retailers starting their summer sales early.

Andy Mulcahy, strategy and insight director at IMRG, said: “In this country we have a tendency to regard online retail and physical retail (high streets) as being completely separate, an idea that has been fed over the past few years by the consistent growth in online even as the high street struggled. What we are now seeing is that they are not separate at all, but in fact deeply interconnected – hence growth in the first half of 2019 was the lowest yet recorded.

“With so much media coverage of well-known retailers announcing profit warnings and store closures, customer confidence in shopping with them is low. This forces them into heavy discounting to drive sales and their competitors get dragged into it too. It has now become so widespread that shoppers are used to the wide availability of discounts and many retailers – whether online-only or with a store portfolio – seem a bit stuck in it even before we reach the Black Friday peak.”

Copyright © 2019 FashionNetwork.com All rights reserved.