Online Sales Growth Dips In May, But Spend Remains High Overall

• Online retail sales fell by -9.1% Year-on-Year last month, against very high May 2020 growth of +61.0%
  
  
• Despite this, spend remains strong with volumes up +46% when compared against May 2019
  
  
• May’s performance falls well below the 3-month, 6-month and 12-month rolling averages of +25.2%, +44.3% and +47.0%
  
  
• The majority of categories saw little-to-no growth, following huge gains in 2020, with health and beauty and home and garden in particular slowing to -29.2% and -9.4%
  
  
• Clothing and beers and wine bucked this trend, recording rises of +13.1% and +7.5%

With the high street open once more, online retail sales recorded their largest drop in volume ever, with growth dipping by -9.1% Year-on-Year (YoY) in May. That is according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers.

When you take away the comparison to May 2020’s very high growth of +61.0%, however, the figures paint a far more positive picture. Measured against May 2019’s pre-pandemic levels, last month’s figures actually represent a +46% increase in sales volume. Meanwhile the Average Basket Volume (ABV) has been rising steadily throughout the year, and now stands at £130.

At a category level, the tide continues to turn on those categories that flourished in 2020 and now face very high YoY comparisons, with electricals (-6.0%), health and beauty (-29.2%) and home and garden (-9.4%) all down in sales growth. After the previous month’s surge (+35.8%), it also appears consumers have had their footwear fix as sales fell back to -7.3%. 

On the flip side, although holidays abroad are still in flux, clothing continues to perform well (+13.1%) – perhaps as consumers scramble to cover all eventualities of the unpredictable British weather. Elsewhere, beers and wine also had a strong month, with growth of +7.5%. 

Andy Mulcahy, strategy and insight director, IMRG:

“While the -9.1% Year-on-Year (YoY) drop is technically the biggest in the 21-year history of the index, it can be misleading as it is compared against a huge growth rate last year. The monthly growth between April and May is more revealing; when comparing the same period in 2019 (i.e., a normal year) there is a 10-percentage point difference this year, which also happened between March and April. So, there is definitely a slowing down in demand, though from a very high base. 

“Things are changing fast: the high street reopened in April, then further easing of restrictions in May brought more spending opportunities. Then, in June, all restrictions may be removed, with people likely to use backed-up holidays in July and August to an even greater extent than normal, so online should be impacted by that. If all goes according to plan there, summer could see this trend of decline in online volume continue.” 

Lucy Gibbs, managing consultant - Retail Lead for Analytics & AI, Capgemini:

“A significant drop in Year-on-Year performance in May is not surprising against last year’s heights of online growth. This was accentuated for multichannel retailers (-13.9%) compared to online only (-1.34%) as hospitality has started to open up this month and consumers returned to the shops. Budget retailers also saw the largest swings, down -12.8%, compared to mid-market (-6.2%) and premium retailers (+0.2%). 

“Consumer confidence has recovered to pre-lockdown levels in May as hospitality venues open up which is good news for retailers, however this, combined with the arrival of warmer weather in June may see online performance against last year continue to swing to the negative for the next month or so.”

Source : IMRG - Capgemini

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