EDITORIAL Online sales fall while store sales appear to improve: insights into UK retail

In today’s InternetRetailing newsletter, we report as two new sets of figures show online sales falling in January, even though store sales appear to have picked up. A 14.4% drop in department store ecommerce sales, compared to the same time last year, drove a fall in non-food online sales while clothing and footwear and household goods retailers also saw falls in their online sales, according to the Office for National Statistics. Etail association IMRG detected a small fall in year-on-year online sales in January, following a stronger showing in the run-up to Christmas. 

Laura Ashley reported gloomy half-year figures for its homewares and fashion sales, as online fell by 15% in the first six months of its financial year, to December 31 – falling faster than its total sales across all channels (-10.8%).

Meanwhile, analysis from discount aggregator LovetheSales.com suggests that UK fashion brands have consistently cut their prices since the country left the EU on the January 31.

What do these different findings tell us about the state of ecommerce and multichannel retailing? IMRG’s Andy Mulcahy suggests that discounting played a part in driving high levels of peak sales in the run up to Christmas, while LovetheSales’ Stuart McClure sees a response to the UK’s departure from the European Union, with discounting climbing higher after Brexit day on January 31, rather than reducing as in previous years. He says that’s likely to be a result of weak consumer confidence, and the desire to reorganise stock and build cash ahead of the end of the transition period. Laura Ashley’s Andrew Khoo suggests that Brexit uncertainty was a factor in its reduced sales ahead of Christmas, while its profits have been hit by higher costs that also include minimum wage and business rates increases. 

Taking these points together, it seems that a lack of confidence, influenced to an extent by Brexit uncertainty, has held back customer demand to the extent that more discounting is now needed in order to sell products. Multichannel retailers, who were worst hit by declines in online spending in January, according to the IMRG, but, the ONS figures suggest, saw their in-store sales rise, may well have concentrated sale stock in stores in order to attract shoppers. None of this suggests that Brexit uncertainty is now behind us, rather that the can has been once more kicked down to the road, to the end of the transition period. Retailers seem to be responding by organising for that point, discounting to sell down stock while perhaps stashing cash to mitigate uncertain future times. 

Today we share the inside angle on how the new RXUK Top500 fits into RetailX research, and in our guest comment, Suresh Menon of Informatica considers how brands and retailers can best meet customer demand for high-quality product data.

Image: Fotolia

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