January online retail growth lowest ever as BWS sales fall

By James Bayley

Published: 15 February, 2022

January saw the lowest rate of online retail growth ever at a slump of -24.4%, according to the IMRG Capgemini Online Retail Index, which tracks the online sales performance for over 200 retailers. At category level, beer, wine and spirits fell even further, reaching an average of -26.6%.

According to Andy Mulcahy, strategy and insight director at IMRG, the low rates can be attributed to the unprecedented growth experienced during the 2021 winter lockdown.

Mulcahy said: “The first quarter of 2021 had a severe lockdown in place which drove huge online growth, so the year-on-year comparisons for the early months in 2022 are going to be harshly negative as a consequence.

“This can make it seem like online sales are in freefall, whereas actually, it is just a natural rationalisation of the 50-60% increases we saw this time last year."

Nevertheless, in 22 years of tracking, online retail growth has never been so low. With the cost of living going up and inflation at +4.8%, it seems that retailers will struggle to match the dizzying heights of the lockdown-generated e-commerce boom.

The year 2021 ended on +2.7% total growth for the online retail market overall – the lowest annual growth rate ever. Continuing this pattern, January 2022’s drop directly results from retailers competing against a staggering growth rate of +61.8% from January 2021, when the UK was in a lockdown and online channels experienced a significant boom.

Fast-forward 12 months, and not only are retailers up against this steep growth rate, but restrictions have been lifted, enabling consumers to carry out more in-person shopping across channels.

As for drinks, beers, wine and spirits outperformed sectors such as makeup, which was down 45.7%, and electricals (-36.7%), but performed far less ably compared to fashion, with clothing up 5.4% YoY.

Compared to other categories, it is clear that electricals and beauty products have suffered post-lockdown when clean-living and home improvements were high on people’s agenda. Fashion, meanwhile, saw an uplift as social gatherings and events resumed.

Consumers may not be buying as much alcohol as they were 12 months ago, in the midst of a lockdown, but encouragingly, there are signs they are increasingly making up for lost time in restaurants, bars and pubs across the country.

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