IMRG: UK online sales fall in February

UK online retail sales in the month before the coronavirus, Covid-19, really hit the country, were down by 0.4% year-on-year, according to the latest figures.

E-tail trade group, IMRG, said sales performance in February fell well below the three-, six-, and 12-month rolling averages of 4%, 7.5%, and 5.3% respectively.

The data, from the IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers, suggested it was a particularly bleak month for multichannel retailers, whose sales dropped by 8.2%. Online-only retailers experienced a 12.5% year-on-year upturn in sales.

IMRG said these discrepancies could be “hugely exacerbated by the coronavirus crisis”, especially with many shop closures expected to mirror what has happened in other countries where the virus has progressed at a faster rate. Some retailers in the UK, including Apple, Clarks, and Fenwick, have already temporarily closed all their shops in light of the health emergency.

According to the e-tail index, gardening sales in February were down by 22% from the same month in 2019, reflecting the much wetter conditions compared one year before. Footwear was the second lowest performing category, with sales down by 7.6%.
Clothing sales growth of 13.9% was a positive for the industry, although it should be viewed against very weak growth of 0.9% recorded at the same time last year.

Andy Mulcahy, strategy & insight director at IMRG, commented: “Over the past few years, retail has become an industry beset with problems – even before the coronavirus crisis hit the UK, which has massively shifted shopper behaviour.

“We were already seeing a division opening up between the growth fortunes of multichannel and online-only retailers, and this might be a trend that becomes increasingly profound given the current climate.”

The IMRG-Capgemini figures arrive as business intelligence group, GlobalData, warned that a move to online sales will not be enough to supplement lost Mother’s Day spend in stores in 2020.

Mother’s Day usually represents a pre-Easter spike in trading for retailers, but with many consumers avoiding physical stores, a softening of sales is expected.

Georgina Sreeves, retail analyst at GlobalData, commented: “The UK has been thrust into survival mode, which will lead to low consumer confidence and a cut back of non-essential spending as consumers’ livelihoods have been overturned indefinitely.

“This, combined with advised familial separation, will reduce spend on gifts and speciality food and drink purchases. Online greetings card retailers with a strong online proposition such as Moonpig and Funky Pigeon are likely to benefit as consumers choose to shop remotely than visit a store.”

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