Online sales revenues slump for 26th month in a row

Online sales revenues continued their post-pandemic decline in July, which makes 26 months in a row of negative or flat growth.

The latest figures from the IMRG Online Retail Index show a decline in online revenues for July of 1.2% compared with the same month in 2022, although they were up by 1.4% on June. Total market traffic was up by 1.9% year on year for the first time in seven months, while compared with May traffic was up by 5.4%.

Online sales in the furniture category dipped by 11.7%, while homewares and decorations fell by 7.7%. Electricals fared very well in certain categories, with major appliances up by 3.8% and small appliances soaring ahead by 47%. However, audio and visual product saw declines of 3% and 9.7% respectively.

IMRG believes that the month-on-month increase on traffic could be attributable to the spell of warm weather in June, which also saw demand for garden products rise by 10% year on year.

Focusing on the dramatic performance of small appliances, IMRG pointed out that traffic performance does not always equate with revenue performance, evidenced by the fact that this category has seen a decrease in traffic throughout 2023, leading it to speculate that “customers know what type of fryer or kettle they want and are less likely to browse around”.

Commenting on the July figures, IMRG strategy and insight director Andy Mulcahy said: “Following the pandemic boom, when lockdowns drove huge surges in online purchases and it appeared possible that its penetration into retail overall had rocketed forward several years, the market has actually been in decline ever since. However, while negative growth has become normalised, the trend lines are heading back toward positive growth again, likely in time for the most important time of the year for retail – Black Friday and Christmas. Provided, of course, the looming mortgage crisis doesn’t blow everything off target again.”

The IMRG Online Retail Index has been tracking online sales since 2000 and monitors the online sales performance of 200 UK retailers.

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