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Ecommerce sales grew slower in May than for more than four years: BRC

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Ecommerce sales grew at their slowest rate for more than four years in May, according to new British Retail Consortium (BRC) figures out today.

Online sales of non-food products grew by 4.3% in May – down from 13.7% a year earlier, and at its lowest level since the BRC analysis started in December 2012, the BRC-KPMG Online Retail Sales Monitor found. The three-month average stands at 7% – also the lowest the BRC report has yet recorded.

Across the UK retail industry, sales fell by 0.4% on a like-for-like basis from May 2016, when they had increased 0.5% from the preceding year. They rose by 0.2% on a total basis, down from growth of 1.4% a year earlier. This, said the BRC, was the lowest growth since January, once the distortions caused by a late Easter were taken into account.

During the month, online sales represented 22.1% of total non-Food sales in the UK, up from 21.2% a year earlier. While online sales contributed 1.3 percentage points to retail sales growth in the three months to May, in-store sales fell back, contributing a negative 1.2 percentage points. In-store sales fell by 4.4% in May alone – again, the sharpest decline since the BRC series began.

Helen Dickinson, chief executive of the BRC , said: “The slowdown in overall non-food sales was mirrored online in May as annual growth fell to its lowest on record. Though sales in all categories but one saw growth, this was subdued as consumers held back on non-essential purchases.

“Where there is willingness to spend on non-food items, this is largely concentrated on value lines. The clothing and beauty categories in particular were boosted by some late season promotions, which looks promising for those retailers who will be launching their mid-season sales this month.

“For the second consecutive month, the increase in the online penetration rate has remained below one percentage point. Retailers will be increasingly looking to innovate and optimise their online channels to convert a greater share of online browsing into sales.”

Paul Martin, UK head of retail at KPMG said: “Whilst non-food online sales continue to deliver growth, the significant news is that this month’s year-on-year growth is the lowest recorded since our online retail sales monitor began back in December 2012. Broadly speaking, most categories noted a rise, but growth had clearly been muted due to shoppers clawing back on non-food purchases.

“Bucking the general trend, health and beauty products continue to be the rising star, with holiday season, sunshine and hay fever likely to be fuelling this growth. Elsewhere, the more seasonal weather in the month is likely to be behind fashion sales performing better.

“With such meagre growth in online sales in May, it is vital online retailers master the art of customer-centricity and personalisation. Ensuring the right products are available at the right time, and that surplus stock is not sold at significantly reduced prices, is becoming ever more important. Success will come from an ability to target the online shoppers who spend more and return less.”

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