The online sector has joined high street retailers in suffering from the poor weather, weak consumer confidence and tough comparatives with the last year.
According to the latest IMRG Capgemini eRetail Sales Index, May continued the discouraging 2019 trend of below-average sales growth, with just a 1.9% year-on-year rise. This compares to the same time last year, which saw the strongest May growth for online retail since 2010, boosted by the royal wedding, the football world cup and warm weather.
Sector analysis in May shows a number of categories struggling significantly. Electricals (-27.5%) and Gifts (-18.5%) continued the downward trend seen since last November and September respectively. BWS recorded its first negative growth for the year, down 19.7%.
Clothing had a much slower growth rate vs. last year’s performance (+8.2%). Meanwhile, accessories, which have seen successful growth in previous months, recorded its worst performance in 10 years, down 20.0%.
However, the Health & Beauty sector continued its strong monthly performance, growing 22.6%, buoyed by the explosion of consumers focusing their attention on health and wellbeing as well as the rise in celebrity beauty endorsements.
Andy Mulcahy, strategy and insight director at IMRG, commented: “When tracking the movement of something in an index, you sometimes get results that are a bit skewed by the growth rate you are comparing against. May 2018 was one such month – with the early summer heatwave, Royal Wedding and a World Cup looming, people seemed happy to spend out pretty lavishly on retail, so May 2019 was always going to be anchored by it. That said, 1.9% growth is far lower than we might have expected; indeed, it’s the lowest since we started tracking nearly 20 years ago, so it seems there is something more going on here.
“The fact is that retailers are caught in a perfect storm at the moment – with all the problems on the high street, changing customer behaviour, shopper confidence low due to all the CVAs and negative coverage of major brands, a shifting competitive landscape; and of course even the weather is refusing to provide any relief. It’s proving tough to find any positives in the sales performance at the moment.”
