May brings sluggish online sales growth

Online sales of non-food products rose 4.3% in May compared with a 13.7% lift a year earlier – representing the slowest growth since December 2012.

The British Retail Consortium (BRC)- KPMG’s May online retail sales monitor – covering the four weeks from April 30 to May 27 – reports that over the three months to May, online sales of non-food products grew 7% year-on-year: the lowest figure since the monitor was launched in December 2012.

BRC chief executive Helen Dickinson OBE said: “The slowdown in overall non-food sales was mirrored online in May, as annual growth fell to its lowest on record. Though sales in all categories but one saw growth, this was subdued as consumers held back on non-essential purchases.

“Where there is a willingness to spend on non-food items, this is largely concentrated on value lines. The clothing and beauty categories in particular were boosted by some late season promotions, which looks promising for those retailers who will be launching their mid-season sales this month.”

She added: “For the second consecutive month, the increase in the online penetration rate has remained below one percentage point.

“Retailers will be increasingly looking to innovate and optimise their online channels to convert a greater share of online browsing into sales.”

KPMG UK head of retail Paul Martin commented: “Whilst non-food online sales continue to deliver growth, the significant news is that this month’s year-on-year growth is the lowest recorded since our online retail sales monitor began back in December 2012.

“Broadly speaking, most categories noted a rise. But growth had clearly been muted, due to shoppers clawing back on non-food purchases.

“Bucking the general trend, health and beauty products continue to be the rising star, with the holiday season, sunshine and hay fever likely to be fuelling this growth. Elsewhere, May’s more seasonal weather is likely to be behind fashion sales performing better.

“With such meagre growth in online sales in May, it’s vital that online retailers master the art of customer-centricity and personalisation.

“Ensuring the right products are available at the right time and that surplus stock is not sold at significantly reduced prices, is becoming ever more important.”

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