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June online retail growth remains negative, but freefall eases slightly

The findings reveal online retail sales were down -2.3% Year-on-Year (YoY) in June. This represents the highest result the Index has seen in 2022 – and a significant climb against the 3- (-7%), 6- (-16.8%), and 12-month (-18.8%) averages. Month-on-Month (MoM), the market reported +1.5% sales growth against May, but this fell short of the 2–5% that is typical for this time of year.

As for beers, wines and spirits - sales were up 24.1% on last month but down 18.7% YOY.

Andy Mulcahy, Strategy and Insight Director, IMRG said: “While the decline for BWS looks bad in isolation, most categories experienced a decline in June, with BWS only the fifth-lowest performer. Meanwhile, the Average Basket Value is up significantly Year-on-Year (£108 in June 2022 vs £87 in June 2021), in line with many other categories, but it has been relatively flat across the months of 2022 so far. BWS decline may suggest shoppers are switching to cheaper brands, which has also been evident in grocery as the increasing costs of living continue to spiral.”

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The total market is down -16.7% in H1, with categories such as gardening and homeware plummeting over -30%. Meanwhile, clothing continues to recover from the pandemic at +4% YTD and +11.3% YoY, perhaps buoyed by the uptick in in-person events and summer travel.

Elsewhere, after rising rapidly since January, the Average Basket Value (ABV) seems to have stabilised for the first time this year – dropping from last month’s peak of £150 back to £145. However, this is still very high historically, suggesting that consumers continue to prioritise quality over quantity with their purchases.

Mulcahy added: “It speaks volumes that a decline of -2.3% feels quite good in the context of 2022. The cost-of-living crisis is having a profound impact on customer behaviour in ways that set it apart from the pandemic.

“For example, while the pandemic drove massive growth online, it didn’t change things like average spend or conversion. If we compare a lockdown period (Q4 2020) with a non-lockdown period (Q4 2021), the differences in some metrics are negligible – the percentage of visitors who view a product page on retail sites fell -3.5%, while the percentage that add something to their basket and proceed to the checkout fell -4.5%. Comparing Q1 2021 with Q1 2022, as the cost-of-living increases started to bite, those falls are -12% and -22.7%, respectively. In some respects, incredibly, it is having a bigger impact.”

• IMRG
• Online Retail
• Covid-19
• lockdown
• Cost-of-living