Industry

Online sales grew by 19% in April – and e-grocery sales by 17%

Ecommerce sales grew by 19% last month, according to official figures out this week, which showed online grocery sales growing by 17.6% in April.

In total, estimated the Office for National Statistics’ Retail Sales report for April 2017 shoppers collectively spent £1bn a week online during the month –accounting for 15.6% of all retail spending, excluding automotive fuel. That’s up from a 14% share last year.

Meanwhile, the monthly IMRG Capgemini eRetail Sales Index suggested ecommerce sales growth of 13.9% in April, which, the trade association believes, is lower than might have been expected.

Justin Opie, managing director at IMRG [IRDX VIMR], said: “It may seem odd to regard growth of +13.9% as disappointing, but taking the other factors into consideration we can identify some indications of suppressed growth potentially linked to shopper confidence. Looking at historical data, it seems that elections exert an influence on spending patterns and we may expect that to continue into May due to the uncertainty that comes with these events. We then enter the period of official Brexit negotiations with the EU, when the progress of those discussions will likely be reflected in shopper behaviour. That could be a period of considerable turbulence for retailers due to the potential for currency fluctuations, shifting shopper confidence and rising inflation.”

The ONS figures found that across all UK retail channels, shoppers bought 4% more goods in April than they did a year ago, and 2.3% more than they did last month. They spent 7.1% more than they did a year ago – as average store prices rose at their fastest rate since 2019 – and 1.9% more than they did in April.

The fastest growth came in online grocery sales. Food ecommerce sales grew by 17.6%, compared to last year, and accounted for 5.1% of all sales.

Clothing, footwear and textile shops saw their online sales grow by 11.7% during the month, to account for 14.1% of all sales in the category, while household goods stores saw online sales grow by 9.2%, to account for 9.9% of all sales. Department stores saw an 8.5% boost to ecommerce sales, accounting for 13.4% of all sales.

Commenting on the figures, David Jinks, head of consumer research at online parcel broker Parcel Hero, says the rapid growth of online shopping mirrors the chief prediction in its new report, 2030: The Death of the High Street, that home shopping will wipe out 50% of town centre stores by 2030.

He said: “The rapid disappearance of High Street staples such as Staples and Jaeger are just the tip of the iceberg. Home deliveries are set to destroy our town centres by 2030 unless there is an urgent rethink in the way we use our High Streets.

“One good Easter won’t make the High Street’s summer. Between 2020 and 2030 half of the UK’s existing shop premises will have disappeared. 100,000 stores will close, leaving just 120,000 shops on our high street. And that’s because by 2030 ecommerce will account for around 40% of all UK retail sales.”

He added: “Unless we want a High Street of nail bars, charity shops and tumbleweed, our town centres must return to a Victorian model. Shopping should become a more social experience again – and High Streets a venue people want to visit as part of their leisure time.”

Rupal Karia, managing director – retail and hospitality at Fujitsu UK & Ireland, said: “The latest stats from ONS clearly shows the ongoing challenges faced by retailers on the high street. Whilst it’s positive to see spending growth increase slightly from previous months, in order to continue this progress retailers will need to adopt new and agile tactics for attracting tomorrow’s customers. To really stand out, it’ll be more important than ever for retailers to make the in-store experience as seamless as shopping online – this is where smart use of in-store technology can come into its own.

“Our recent Forgotten Shop Floor study found that 8-in-10 consumers reporting they would spend more with retailers that have a better technology offerings which means that whilst high street stores hold greater opportunities than ever, those unwilling to embrace technological advancements will not reap the awards. With customers and competitors poised to move forward, those standing still face a worrying truth – being the next generation of retailers to be pushed out of the high street for good.”

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IMRG

IMRG

IRDX: VIMR

Their membership community comprises businesses of all sizes – multichannel and pureplay, SME and multinational, as well as suppliers to the industry. (more…)

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