COVID-19 continued to reshape the retail landscape in May, as consumers acclimatised to the enforced shift of shopping online. The UK’s second month under lockdown saw online retail sales swell to a twelve-year high, up a staggering +32.7% Year-on-Year (YoY) in May. That’s according to the latest IMRG Capgemini Online Retail Index, which tracks the online sales performance of over 200 retailers.
Last month’s results were overwhelmingly driven by soaring sales in three categories – home and garden, electricals, and beer, wine & spirit. Likely boosted by May’s record-breaking 266 hours of sunshine, home and garden sales were up +162.6% YoY and an equally huge +138% year to date (YTD). Meanwhile, as many employees adjusted to the extension of remote working policies, electricals reported its strongest sales on record – up a historical +102.8% YoY. Perhaps in a nod to the bank holiday sunshine, sales in beer, wine & spirit also climbed – up +94.9% YoY and +78.6% YTD.
Unfortunately, online clothing sales continued to feel the pressure of weak demand, down -9.8% YoY. Within this category, footwear sales were hardest hit (-16.4% YoY), but womenswear and menswear were also down -14.7% and -14.4% respectively. Taking a closer look at the results by retailer type, last month’s stellar sales were once again largely generated by multichannel outlets. As they continued to pivot their focus towards online sales, multichannel retailers outperformed their online only counterparts with sales up +53.1% versus +10.1%.
Lucy Gibbs, managing consultant – Retail Insight, Capgemini, said: “The demand patterns from April continued through to May, with some product sectors seeing extraordinary sales growth and others still in decline. The months most outstanding performance came from the Garden market, reporting a 163% YoY increase, even beating its last period of extraordinary growth during the 2018 summer heatwave. The Electricals market also recorded its highest ever YoY growth since the IMRG Capgemini Sales Index began tracking the sector in 2003. The ‘stay at home’ message has boosted sales of office equipment, games consoles and televisions.
The clothing sector has struggled throughout the lockdown period as shoppers move their focus away from personal fashion, and towards home improvement and home entertainment. This month saw a decline of -9.8%, however the silver lining for clothing retailers in May, is a healthy 37.6% uplift from April, indicating shoppers are showing an increasing interest in updating their wardrobes as lockdown relaxes, time will tell if a gradual return to the ‘new normal’ aid the recovery for clothing to positive growth.”
Andy Mulcahy, strategy and insight director, IMRG, adds: “There has been a lot of talk about the ‘new normal’ and, after two months of exceptional growth rates for online retail, we have to speculate as to what that might be in a retail sense as the shops start to open again. Will online be able to retain its share and, if so, to what extent?
There are two aspects that will greatly influence the answer to that question – demand and culture. Much spend has been forced online, and often in an artificially-inflated way; the huge spike in freezer sales will be a blip for example. We might expect online demand to remain much stronger over the longer-term however, and that online growth has been achieved with clothing, a major category, in negative growth. Once demand returns there, will it be in stores – where 30-minute queues to get in will quickly become tiresome – or online, which is by its very nature socially-distanced? It seems reasonable to assume demand and culture will have been forever altered.”
