Despite evidence of an upturn in growth last month, online retail sales took a turn for the worse in September, falling back to -12.5% year-on-year amid weakening consumer confidence.
This is according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers. The decline was mostly driven by the first week of the month, the traditional back-to-school period, which saw the steepest drop (-12.94%). There were some positive signs when looking at the month-on-month comparison (+2.1%), which was up for the first time since the high streets reopened in April – however, pre-pandemic patterns indicated this would typically be closer to +6%.
Breaking the results down further, September’s subdued sales suggest consumers are browsing and not buying, which is likely the result of a variety of factors. These include the supply chain shortages and consumer caution in the face of rising product inflation and gas prices, as well as Christmas browsing starting earlier. This is evident when looking at the conversation rate, which was down from 3.9% in September 2020 to 2.8% for the same month this year.
At a category level, beers, wines and spirits (+18.6%), garden (+5.2%) and clothing (+11.1%) all maintained good levels of growth – but were the only ones to do so. As with last month, health & beauty was the worst-performing of the group – down 32.7% as part of a sustained downward trajectory.
Lucy Gibbs, Managing Consultant – Retail Lead for Analytics & AI at Capgemini, commented: “Online sales were more subdued in September, and basket value decreased month on month for the first time this year. This has been reflected across the market alongside a dip in consumer confidence as back to school and a push for a ‘return to normal’ coincides with concerns on energy bills, costs, and tax hikes.
“Supply chains are also under significant strain, presenting challenges for retailers as we move into the peak trading period. How retailers will navigate the build up to Black Friday and Christmas events will be crucial to manage the availability of stock throughout the period and maintain customer service levels.”
