UK sees highest January online retail sales in seven years
UK online retail sales in January were up 12% year-on-year (YoY) in January, according to the latest figures from the IMRG Capgemini e-Retail Sales Index. IMRG said this was a “steady start” to the year which builds on a solid performance in January 2016, when growth was 15%.
The average basket value (ABV) for online retailers was recorded as £85 – this was up from £79 a year earlier and the highest value for a January since 2010.
It was not a case of increases across the board, however. While clothing, gifts and accessories recorded a rise in ABV, the electricals sector dropped 12% to £129.
Looking at other sectors, sales growth for clothing retailers was up 11% and the gifts sector saw a 62% jump.
Justin Opie, managing director of IMRG, commented: “January’s figures reveal a steady start to the year, but 2017 is not without its challenges for online retailers. The most pressing one relates to the devaluation of the pound following Brexit, as it means price rises are looming for an industry where retailers often get pressured into a cycle of discounting to stimulate sales activity among customers. One area where we may see a big impact is electricals – already having a tough time online with sales growth down -8.5% in January and the average basket tumbling. Sonos, Microsoft and Apple among others have recently announced big price hikes of 20% and over to come, so retailers in this sector may continue to have a difficult period to navigate going forward.”
Bhavesh Unadkat, Principal Consultant in Retail Customer Engagement Design, Capgemini: “A growth rate of +12% for online retail is pretty strong. However, when compared with the growth rate for the last quarter, it has certainly steadied. The rise in inflation will raise caution among shoppers and with price hikes expected across petrol, electricals and food, this caution will remain for some time to come. The focus for retailers in 2017 should be on ensuring they can capture as much of the UK market share as they can, as well as exploiting international sales, should the pound weaken.”