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Ecommerce growth moderates in a June of warm weather and the World Cup, although sales continue to move online

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Online sales grew more moderately in June – but moved further online, according to the latest British Retail Consortium figures.

The KPMG-BRC eRetail Sales Monitor estimates today that online sales of non-food products grew by 8.5% last month, compared to the same month last year; last June sales grew by 10.1%. The proportion of sales that took place online increased to 23.3% from 22.3% a year ago. 

The growth came as retail sales grew across all channels amid warm weather and the opening stages of the World Cup. Sales grew by 2.3% in total, ahead of the three month average of 1.2% and 12 month average of 1.5%. Sales were up by 1.1% on a like-for-like (LFL) basis, which strips out the effect of store openings and closures.

Helen Dickinson, chief executive of the BRC, said: “Beer, barbecues and big TVs lifted June’s sales as warm weather and World Cup fever gripped the nation. However, with consumers engrossed in the agony and ecstasy of each match, spending on many other items fell. In the end June scored solid, but not sensational sales. 

“The reality is that sales don’t grow on the feel-good factor alone. With households incomes still barely growing faster than inflation, conditions for consumers and retailers remain extremely touch. And things could get toucher: once the euphoria of sporting success subsides, without a deal on Brexit, shoppers face the prospect of significant price increases and shortages of everyday goods. Even if England do go all the way, households may have little to celebrate come next April.”

While online sales of non-food products grew, in-store sales were down by 1.4% in total in the three months to June and by 2.7%, on a like-for-like basis. Across all channels, non-food sales grew by 0.8% in the three months to June, but fell by 0.2% LFL. In contrast, food sales grew by by 1.7% in total and 0.3% LFL over the same period.

Paul Martin, head of retail at KPMG, said June’s results had turned out to be less buoyant than hoped, after May’s positive performance. 

“Sales growth remained in positive territory for the second month running at 2.3%, but as the recent financials of key players’ highlights, sales growth and profitability don’t always go hand-in-hand.

“Grocers benefitted from the brighter weather and of course the World Cup,with barbecues and picnics firmly on the menu, and the weather and holiday season are also likely to be behind the uptick in online fashion sales too. But with so much attention outdoors, other household categories didn’t fare exceptionally well. 

“The summer sunshine, Wimbledon and the on-going World Cup provide a strong foundation for growth in July, but retailers need to ensure that sales translate into profit. With the structural changes the sector is experiencing, as well as increased costs, this is becoming increasingly difficult to achieve.”

Image: Fotolia

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