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May 10, 2022
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Tough April for UK e-tail points to 'end of digital boom' - report

Published
May 10, 2022

Good news for UK online fashion sales. Not so good news for digital beauty sales. Even worse for the e-tail industry as a whole. That’s the latest lacklustre UK sector report for April that suggests the digital boom could well be over.


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Overall, the picture looks dismal with the sector struggling to even return to pre-pandemic level sales in April, according to the latest IMRG Capgemini Online Retail Index released on Tuesday.
 
But at least fashion proved to be one bright spot “as an example of a category seeing good post-pandemic sales”. It recorded 4.2% year-on-year growth in April – described as “a solid result” against huge growth of 51.4% in April 2021.

But beauty sales, which have had a stellar run over the past two years, appear to be slowing having seen a poor performance for a few months now and down 27% year-on-year in April. 
 
The Index, which tracks the online sales performance of over 200 retailers, showed there was no actual overall growth in online sales, with last month’s -12% performance “simply mirroring April 2021’s growth of 12%”.
 
This was also evident in the weekly results, with growth in week four of April, for example, at -10% against +10% for the same week the year before.
 
The performance is nowhere near a return to pre-pandemic levels, prompting Andy Mulcahy, strategy and insight director for IMRG, to say: “Throughout the pandemic, there was much speculation as to what the ‘new normal’ might be once everything has settled down again. After two years of huge volume increases online, it would seem that growth is now over.”
The report noted April is the first month in two years where Index growth is not skewed by lockdown comparisons.
 
That said, despite the cost of living crisis, month-on-month growth was up 3.8%, which was slightly better than expected, and average basket volume (ABV) reached a record high at £146, £3 above the previous pandemic record set in August 2021.
 
Lucy Gibbs, senior manager, retail lead for analytics & AI, Capgemini, added: “If we project forward the pre-pandemic trends we can infer which categories are still overperforming; home and garden and health and beauty are still well ahead of where we would expect them to be despite tracking negative YOY growth for this month. Clothing is approximately in line with where we would expect, picking up after losing out in the pandemic.”
 

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