Online shoppers held back on spending on in May even as average basket values reached record highs, new IMRG figures suggest.
Online shoppers spent 8.7% less in May than they did a year earlier, and 0.6% less than they did in the previous month of April, according to the May 2022 edition of the IMRG Capgemini Online Retail Index. A year earlier, online sales fell by 6% against the previous year, in the first month that was clear of the third UK Covid-19 lockdown.
Customers held back from spending as average basket values reached a record high of £151 – £6 higher than in April 2022. This, says the IMRG, is likely to be a result of factors including inflation, shoppers buying several items at once to avoid delivery fees and a preference for higher quality items in order to avoid having to buy again. Website traffic rose by 8% year-on-year, although retailers have reported that shoppers are taking longer to decide on a purchase.
Andy Mulcahy, strategy and insight director at IMRG, says: “There’s no dressing it up, May’s performance was pretty awful online. April’s results suggested growth might be flat, but it is clear now that the economic situation is having a deep impact on demand; if it wasn’t for the Jubilee, which produced a slightly better week than the others, the decline might have been double-digit against negative growth for the same month last year.”
Sales were weakest in the first week of the month (-10.9%) before almost posting a recovery in the third week (-0.3%), in which both half-term and the Jubilee fell.
Most of the 200 retailers whose online sales are tracked by the IMRG reported negative growth, often on top of negative figures for the same time last year. Health and beauty (-28%) and home and garden (-23%) are among the categories seeing the sharpest declines. However, clothing continues to see strong performance – with sales rising by 14%, with growth reported across both womenswear (+18%) and menswear (+18%). The rise comes a year on from 13.5% growth in closing sales.
“It seems to be a category making up for lost time,” says Mulcahy, “following almost flat growth in 2020. It could be that it is now simply benefiting from the increased number of people shopping online, combined with a general sense among the UK public that the pandemic is over and they can go out as they please again.”
Bhavesh Unadkat, head of brand and content at creative consultancy frog, part of Capgemini Invent, says: “Digging into May’s negative result, a closer look at where consumers are willing to spend money offers some interesting insights. Countering what you might expect as pockets tighten, the sales performance of budget retailers actually plummeted by 15% last month – with luxury retailers (-3.6%) also experiencing a fall. In fact, it was only the mid-market retailers (+0.5%) who saw any type of growth. With less disposable income to hand, this definitely lends weight to the speculation that consumers are seeking out longer-lasting quality in their goods.”