E-retail back on track as Brits get back to spending, IMRG Capgemini Index finds

The latest figures from the IMRG Capgemini e-Retail Sales Index have revealed online sales are back on track following a disappointing end to H1, recording an annual growth of 14% in July. The Index grew 3% month-on-month, which is a stark contrast to the 5% decrease experienced between May and June. An estimated £8.1bn was spent online; a significant increase on the £7.1bn spent during the same period last year.

Adding to recent evidence of consumer confidence in the economy, the travel sector recorded its strongest July performance since 2010; 13% year-on-year.  This also follows four consecutive months of single-digit annual growth, averaging at just 5%. This return to growth in ‘big-ticket items’ was also seen in the Electrical sector which, following a year-on-year increase of just 7% in June, shot up to a significant 19% in July; shaking off its post-World Cup slump.

Another sector that recorded impressive growth last month was Home & Garden, which recovered from its unspectacular 8% growth in June, to a very solid 17% in July. This was no doubt helped by the warm weather; the driest July since 2006.

Tina Spooner, chief information officer at IMRG, commented: “With the July Index performance back to solid double-digit growth, it appears the disappointing results in June were merely a blip.

“It is evident that consumers are now spending more money online, and the increase in high-ticket purchases including electrical items, furniture and holidays, indicates that consumer confidence is certainly increasing. The UK online retail industry is, once again, performing close to our growth forecast and we are still on track to see in excess of £100 billion spent online for the first time this year.”

Adgild Hop, head of retail consulting U.K. at Capgemini, said: “The return to growth this month will be much welcomed by the UK’s retailers. Earlier results this year had suggested that British shoppers weren’t averse to spending but just reluctant to splash out on the more expensive luxuries. With the recent positive noises about the UK economy, this month we have seen that consumer confidence appears to be improving, with a strong increase in big-ticket transactions in Travel and Electricals in particular. Retailers will no doubt hope to see this trend continuing for the remainder of the year and into Christmas.”

Chris Clarkson, managing director of Sunshine.co.uk, said: “During June Sunshine saw a 39% increase in bookings and a 29% rise in revenue compared with June last year.  In July, growth reached even higher levels, with bookings up 44% year-on-year and a 35% annual increase in revenue from a 12% rise in traffic. Conversion rates were also up a significant 29% in July compared with the same month last year.

“Sunshine is very confident consumer confidence is continuing upwards and allowing consumers to loosen their purse strings; however they’re still looking for value in their leisure travel spend.”