UK online retail sales went from strength to strength in April, up +18.8% year-on-year according to the latest figures from the IMRG Capgemini e-Retail Sales Index. This was the highest year-on-year increase since November 2016 and came in despite Easter falling in March.
There was a fall in the overall market conversion rate (down 4.15% from 4.3% year-on-year) marking the fifth consecutive decline this year. This was likely to be the result of the increasing penetration of sales made through Smartphones, which have lower conversion rates generally. Meanwhile average basket values increased, jumping £14, month on month, to £117.12 for multichannel retailers, and by £3.5 to £87.16 for online only.
With April featuring the first warm weather of the year, this is seen as potentially having had an impact on many of the sectors seeing growth. However, while clothing sales increased +15.6% , and the garden sector grew by +12.0%. it was a weaker month for home, which decreased by 15.6% year on year.
“Growth in online retail sales revenue has been markedly higher than expected throughout 2018 so far,” commented Andy Mulcahy, strategy and insight director at IMRG. “One reason is likely to be related to a turnaround in economic fortunes. While inflation outstripped wage growth for most of 2017, the gap has closed in recent months, with wage growth actually higher than inflation in March 2018. This means that, on the whole, UK shoppers should be feeling a bit more confident in making purchases which is reflected in the data we are tracking. In the last six months of 2017, from July to December, online retail sales growth was +12.2% while the first four months of 2018 has come in at +16.2%.”
Continued Andy: “What has been very apparent is that it is online retail that is benefiting, while the high street is facing a sustained downturn. Up until now, there have been multiple reasons to suspect that this split in performance may have been influenced by various external – and therefore temporary – factors, such as the above-average rainfall in January, the snow in February and March and Easter being early this year. The fact that April 2018 is comparing against an April last year that included Easter – with the boost to retail that it typically brings – suggests that this is not a blip. As shoppers have started to find themselves with a bit more disposable income in 2018, we are possibly witnessing an acceleration in the shift of shopper behaviour over to online.
He adds that much of the coverage of the downturn on the high street portrays it as a negative development, “but actually, shoppers are still shopping as much as they did before. It’s not retail that is suffering, it’s just undergoing a digital transition at a far faster pace than was previously the case.”
Top: Online sales are riding high.
