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Online sales growth continues to struggle

UK online sales edged up by 0.6% year on year in September, while clothing sales experienced their first fall in more than two years, down 1.2% compared with 2018.

September’s figures, excluding travel, failed to match the already-low six- and 12-month rolling growth averages, respectively 2.3%, 5.3%, and fell well below the 5-year average, of 10%, the latest IMRG Capgemini Online Retail Index shows.

Last month online menswear sales took a severe hit, dropping 22.5% compared with the same period in 2018. Womenswear, footwear and accessories also declined year on year, down 13.3%, 9.8% and 9% respectively. Health and beauty sales were up 16.4%.

Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini, said: “September’s results will have triggered some clear warning signs for retailers as sales are stuttering at the beginning of the ‘golden quarter’. Most notably, the clothing sector was down 1.2%, despite the average basket value remaining flat at £78 and the conversion rate increasing by 2% against last year, which indicates that low demand is the driver for the poor performance. Increasing pressures are hitting consumer spending, with low confidence in the political climate and the warmer weather at the start of the month both attributed by retailers as critical factors in this month’s results. Adding to this, September saw a push for sustainability and reduction in fast fashion, with initiatives throughout the month discouraging new season purchases.”

Andy Mulcahy, strategy and insight director, IMRG, added: “In the six months following the June 2016 referendum result, many expected the economic impact to be negative but actually a lot of the indicators were stronger than anticipated. If the UK does leave the European Union by end of October, while that brings challenges and disruption for businesses, in the short-term the average person isn’t likely to notice any immediate impact. Given that 2016 precedent, should Brexit happen, there might be a collective sigh of relief that the tedium of hearing about it is finally over. We could see a degree of buoyancy in spending just in time for Black Friday and Christmas, which, though temporary, could help get retailers through what otherwise might prove a tough peak trading period.”

 

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