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Strong growth for online shopping in May: IMRG and ONS

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The amount spent on online shopping grew strongly last month, with shoppers persuaded, it seems, by hot weather rather than uncertainty over the upcoming European Referendum.

Official figures from the Office for National Statistics (ONS) suggested a 21.5% rise in online spending last month, compared to the same time last year. Sales were up by 6.4% compared to last month. Across the UK retail industry, said the ONS’ Retail Sales report for May, the amount spent rose by 3.1%, year-on-year, and 1.3% month-on-month. The amount bought rose by 6%, year-on-year, as average store prices fell by 2.8%.

According to the IMRG Capgemini eRetail Sales Index, ecommerce grew by 17% in May, compared to the same time last year. That’s the highest rise seen in the index since June 2015, and came as average basket values rose to £81 in the year-to-date from £78 in the equivalent period last year.

M-commerce, said the IMRG report, continued to grow more strongly on mobile phones than on tablet computers. While transactions via a smartphone grew by 79% in May, those via a tablet were up by 5%. Internet spending was particularly strong in the garden (+55%) and clothing (+24%) sectors, although spending on alcohol fell by 3%.

Tina Spooner, chief information officer, at IMRG , said: “Uncertainty around the EU referendum doesn’t appear to have had any impact on the UK e-retail sector, with the latest results from the IMRG Capgemini Index revealing strong growth in online sales during May. It seems the fine weather last month helped boost online clothing sales, with annual growth reaching the highest rate observed in three years, while the garden sector saw a much-needed return to growth after 14 consecutive months of decline, with sales surging 55% compared with May last year.

“Year-to-date, online sales have grown 14.5%, well ahead of our 11% growth forecast for 2016, while sales via mobile devices continue to grow at twice the overall market rate.”

Bhavesh Unadkat, management consultant in retail customer engagement design at Capgemini , said: “It was great to see the Index recording a solid performance for online retail in May 2016, up by eight per cent on an indifferent April 2016 performance and up 17% on the year. The country experienced record temperatures in May and this was reflected in the performance of the fashion and garden sectors, which both recorded significant growth.

“However, beers, wines and spirits surprisingly declined on the year, conflicting with the hot weather correlation. This was understandable as promotions were not as strong as last year with drinks retailers predominately pushing promotions into June in line with the Euros. We should expect this category to really fly as the summer progresses. Father’s Day, the Euros, a hot summer, the Queens 90th and a summer of sport should all help to grow retailers’ confidence for the months ahead.”

According to the ONS figures, household goods stores benefited from the move towards online spending, with year-on-year internet sales up by 39.7%, accounting for 8.8% of all retail sales in the category. Department stores saw their ecommerce sales rise by 25.3%, to account for 12.7% of spending, and textile, clothing and footwear stores saw 13.9% of sales made online, after internet growth of 23.9%.

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