September online retail sales jump 14%

online retail sales

September’s online retail sales may have recorded the third-strongest growth rate so far this year, but there are signs of macroeconomic pressures influencing shopper behaviour.

Online retail sales in the UK went up 14 per cent year-on-year last month, according to the latest figures from the IMRG Capgemini e-Retail Sales Index.

For the first time since the index was established in 2003, the electricals sector suffered its first negative year-on-year growth with a decline of 5.6 per cent in September.

It also marked the sixth consecutive month of negative growth for electricals, which analysts say may be a result of the impact of inflation due to the relatively high cost of products.

Several electrical manufacturers have also raised prices, which may be leading shoppers to wait until Black Friday to make more expensive purchases.

Sales growth for the gifts sector was also low – up by only 1.9 per cent year-on-year – compared with a growth of 33 per cent in September last year.

Analysts say this may be reflective of shoppers feeling the pressure of inflation and are avoiding making less necessary purchases.

However, clothing saw its highest September year-on-year growth in four years on the e-Retail Sales Index.

This mirrors September data from the Office for National Statistics, which showed that clothing prices rose less sharply than in September last year and may have helped boost shopper confidence in that sector as a result.

“While 14 per cent seems high, it hides the impact of inflation,” Capgemini principal consultant Bhavesh Unadkat said.

“When you look at how much faster online is growing than multichannel it implies that people are currently more price sensitive, comparing deals rather than buying directly through retail.

“Couple this with September’s cross sector spending habits, and it indicates a strong focus on essential purchases, with gifts slowing significantly and electricals continuing to decline.

“It could in fact be argued that electricals now serve as an indicator of consumer confidence, especially when you pit the sector’s performance against the previous year’s across the last six months.”

IMRG managing director Justin Opie highlighted that there were “notable differences” between sales of online-only and multichannel retailers.

“While the online-only retailers are enjoying far higher conversion and sales growth currently, the average spend on multichannel retail sites is much higher,” he said.

“It’s possible that the online-only retailers are benefiting from the lingering perception that the best deals are available online, so as pressure on their available spend increases, shoppers look to the ‘pure’ online brands over the high street alternatives.

“Conversion on multichannel retail sites may also be suppressed by use of store locators and a higher potential for abandoning a basket online, where they were carrying out research, only to complete the purchase in a conveniently-located store.”

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