Online retail sales suffered its worst growth since 2011 for the month of November, as an “underwhelming” Black Friday and extended discounting periods did nothing to rejuvenate consumer spending nor relieve the recent struggles plaguing UK retail.
According to the latest Capgemini IMRG e-Retail Sales Index, online retail sales last month came in at 8.1 per cent year-on-year.
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- UK retail suffers worst November footfall decline in 9 years (BRC-Springboard)
- Bricks-and-mortar retail endured “worst November in 3 years” (BDO)
- Retailers face “nerve-wracking run-up to Christmas” (BRC-KMPG)
- November consumer confidence drops to lowest point for the year (GfK)
- Consumer confidence slumps in November (YouGov/Cebr)
- Mild inflation returns in November amid rising food prices (BRC-Nielson)
- Grocery market grows at weak pace ahead of Christmas
This is below the three, six and 12-month sales growth averages, which are 8.3 per cent, 10.5 per cent and 12.2 per cent respectively.
IMRG and Capgemini attributed this to what was the lowest-ever growth for a Black Friday week, which occurs in November.
While online retail appeared resilient to the struggles experienced on the high street during the first half of 2018 – when growth was up 16 per cent compared to the first half of 2017 – IMRG and Capgemini said it was now being impacted by the tough trading climate.
“Black Friday was underwhelming from a revenue perspective this year and there are multiple reasons why shopper spend may not have responded as well as may have been expected,” IMRG insight director Andy Mulcahy said.
“There is economic and political stability potentially impacting shopper confidence, plus the possibility that people might be becoming fatigued with the event – a factor compounded by negative stories released in the run-up, such as those by Which?.
“One thing that is clear from our research is that heavy discounting had been going on far in advance of Black Friday, which lessens retailers’ capacity for grabbing attention by going into sale.
“Did the sheer scale of the discount rates suppress revenue? Or is the overall peak spend getting more evenly spread throughout the Christmas build-up this year, due to Black Friday falling so early in November before many people had been paid?
“It’s a very complicated story this year, but the duration and depth of discounting rates are likely to be very significant.”
Capgemini principal consultant Bhavesh Unadkat added: “Despite high conversion this month where all weeks saw an increase in orders, the drop in average basket value has impacted the sales growth, suggesting that extended promotions have had an impact on revenue this year.
“The evolution of Black Friday has shaken up the Christmas sales landscape over the last decade, however, the discounting snowball effect may be losing momentum as retailers try to regain control and extend the demand across the festive period.
“We saw a mix of strategies from the retailers; from kick starting offers early in the health and beauty sector, compared to a number of high-profile retailers who made a stand and pulled out of Black Friday altogether to protect their margins and pricing strategy.
“December performance and end of year profits will be the true measure of who has gained and lost in the discounting game this year.”