Election hampers UK online retail progress

Election hampers UK online retail progress

The UK general election contributed to below-expectation online retail sales in April, according to the IMRG Capgemini e-Retail Sales Index. Despite sales being up by 13.9% year-on-year in April, the results were not as high against March figures as expected, particularly given the falling of Easter in April this year.

Bhavesh Unadkat, Principle Consultant in retail customer engagement design, Capgemini, says: “A YoY growth of just 13.9% in a month that also included Easter is yet another sign of slowdown within the retail industry. This is also demonstrated in the MoM increase of only 4.3% – again, despite the falling of Easter – where April is always a strong month. The slowdown is further proved through investigating the clothing sector, which increased 10.5% on the year, but showed the slowest YoY April growth rate for six years. Similarly, while beers, wines and spirits increased 29% on the year, which is likely thanks to the Easter effect, the combined performance of March and April this year versus last (to consume Easter variance) only shows an increase of 9% on the year. All in all the next few months at least will remain a challenge for retail as consumer confidence is impacted by political and economic factors.”

Justin Opie, Managing Director, IMRG, comments: “It may seem odd to regard growth of +13.9% as disappointing, but taking the other factors into consideration we can identify some indications of suppressed growth potentially linked to shopper confidence. Looking at historical data, it seems that elections exert an influence on spending patterns and we may expect that to continue into May due to the uncertainty that comes with these events. We then enter the period of official Brexit negotiations with the EU, when the progress of those discussions will likely be reflected in shopper behaviour. That could be a period of considerable turbulence for retailers due to the potential for currency fluctuations, shifting shopper confidence and rising inflation.”

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Next opts for Paragon HDX