Despite expectations that an early start to festive spending might herald a return to growth in October, online retail sales have continued to remain low, falling by 11.2% year-on-year.
This is according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers. While a month-on-month increase of 11.2% proved the highest since the high streets reopened in April, the performance falls in line with pre-pandemic patterns for this time of year.
Last month’s slowdown in online sales was once again kicked off by a poor first week in October, down 12.5% compared to a decline of only 0.9% during the final week. While the average basket value remained high at £131 (though down from its August peak of £149), the conversion rate fell further (+2.9% in Oct 2021 vs +4.1% in Oct 2020), suggesting ongoing issues with stock levels, due to the pressure on the supply chain.
At a category level, beers, wines and spirits retailers saw positive growth, but only just – up 2.2% compared to last month’s increase of 18.6%. The only other category to record growth was clothing – up 7.5%. Elsewhere, for only the second time since December 2019, garden sales have declined (-7.5%), while health & beauty remained the worst-hit category, down 23.3%.
“October online spending was more subdued than expected this year,” said Lucy Gibbs, managing consultant at Capgemini.
“Stock shortages and supply chain disruptions gave speculation that customers might start shopping earlier than usual, however this may also be having a negative effect; Conversion is down across the board compared to the last two years 2.9% compared to 4.1% in 2020, with stock outs and lack of stock depth contributing to customers leaving the funnel.
“Consumer confidence has also dropped for a third month in a row as financial concerns build due to increasing inflation and interest rates and climbing covid rates, providing a cautious backdrop ahead of the peak season this year. Campaigns for Black Friday are ready and waiting, however will these be enough to draw the share of wallet this season?”
NAM Implications:
People are uncertain re job stability, inflation and are just emerging from unprecedented domestic upheavals.
Why be surprised if it manifests itself in reluctance to spend, on or offline?
