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Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30 day membership trial now.
Online retail sales growth fell by 00% YoY in March (value and non-seasonally adjusted), against significant growth a year ago at the tail end of the third national lockdown (+69.6%).
In March 2021, sales growth was supported by the continued closure of non-essential retail and easing lockdown restrictions with the ‘rule of six’ and one-on-one meetings permitted during the month.
Given these distortions, comparisons on a two year basis give a better indication of online performance. On this basis, online sales growth accelerated by 00%, which was the weakest rise since March 2020.
Cost of living crisis dampens demand
The cost of living crisis dominated headlines in March as annual inflation hit 7% – at least a 30-year high, weakening demand across the sector.
Rising inflation was the top concern for over half (56%) of consumers in April (Retail Economics Shopper Sentiment Survey) accelerating dramatically from the reading at the start of the year (34%).
Confidence deteriorated, falling five points to 00 in March (GfK), falling further April. Levels of 00 or more are only seen in the lead up to a recession. Notably, searches for “recession” reached their highest level since August 2020, rising by 170% YoY in March (Google Trends).
Against this backdrop average weekly online sales fell to £00 in March, the second weakest figure since April 2020. Online penetration fell to its lowest rate since 00 00 (00%).
In terms of category performance, Online Food sales growth fell by 00% YoY (+00% Yo2Y). Increased socialising transferred sales to the hospitality sector at the expense of the online channel.
But rising food prices are also impacting online demand with annual food inflation accelerating to its highest level since September 2011/
Worryingly, of those consumers that have noticed a rise in their cost of living, almost 00 00 00 reported an increase in the price of their food shopping.
Non-Food also suffered from changing consumer behaviour with retailers finding it increasingly more difficult to predict consumer behaviour as pressure on household budgets intensified.
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Online Food spend falls against tough comparison a year ago
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Retail Economics publishes monthly UK Online Retail Sales reports providing intelligent analysis covering a range of retail sales indices giving you cutting edge insights that you can action within your business.
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