Second-lowest online retail sales growth recorded in June

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online sales index

The fallout of the General Election played a part in last month’s online retail sales growth rate, whereby it slowed down dramatically to become the second-lowest June in 16 years.

According to the latest IMRG Capgemini e-Retail Sales Index, UK online retail sales were up 9.5 per cent year-on-year last month, the second-lowest June growth rate since 2001.

The only time it has been lower in June was in 2014, when it was up by 9.3 per cent.

It was also the first time growth has dipped into single-digit territory since October 2015.

The e-Retail Sales Index were published the same day the Office for National Statistics revealed that overall retail sales volumes jumped 1.5 per cent in the three months to June.

June’s online sales follow a slowdown in May, which may have been influenced by the General Election in addition to other factors such as rising inflation.

The warm weather in June also encouraged people to go out to high streets, with total footfall reported as being up 0.8 per cent up on the same month last year according to the latest BRC-Springboard footfall index.

IMRG and Capgemini believe this may have contributed to a contrast in fortunes for online-only retailers – which experienced 11.7 per cent growth last month compared to 31.4 per cent recorded last year.

READ MORE: Retail sales boost drives “renewed sense of optimism” in June

Meanwhile, multichannel retailers may have benefited from use of click-and-collect orders as they recorded eight per cent growth – the same as last year.

A number of retail sectors experienced a drop in online sales, including electricals which went down by 13.9 per cent, gifts which dropped 8.2 per cent and accessories which dipped 1.4 per cent.

IMRG and Capgemini also believe Amazon’s Prime Day may have suppressed spend in June, as people held back their spend for the event which occurred this month.

“Online retailers are facing something of a perfect storm at the moment, having to operate against the backdrop of a continuing wave of political uncertainty, rising inflation, a changing retail calendar and heatwaves,” IMRG managing director Justin Opie said.

Opie added that the low growth rate during election week, which was recorded at 3.4 per cent, “strongly suggests” the election had an influence on online shopping behaviour.

“As did, arguably, the weather – albeit in a much more ‘omnichannel’ sense,” he said.

Bhavesh Unadkat, principal consultant at Capgemini said that despite a “relatively flat” June overall, there were some significant sector specific movements in both directions.

“Summer sun and celebrations drove beers, wines and spirits to its highest June year-on-year growth since 2014,” he said.

“On the other side of the coin, accessories saw its first ever year-on-year decline since we began tracking it in 2008. To give you some perspective, its average year-on-year growth is 48 per cent.

“This is potentially caused by a fall in consumer confidence given current political and economic challenges, driving down spending on luxuries.

“Other worthy mentions include electricals, which has had the first June decline since 2003, likely to be caused by the ‘Amazon Prime effect’.

“In short, a month of ups-and-downs leading to an overall pretty weak June.”

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