Coronavirus drives huge increase in UK online retail sales

UK online retail sales growth was up 32.7% year-on-year in May, the highest annual result since March 2008, according to research by IMRG and Capgemini.

Home and garden, electricals, and beer, wine and spirits were star performers, whilst clothing continued to feel the pressure of weak demand.

The online boom is no great surprise, given that May was the UK’s second month under coronavirus lockdown and very few physical stores were open for business. But will retailers in the space be able to maintain this momentum? It’s worth noting, for instance, that sales were largely generated by multi-channel outlets.

“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,” says Andy Mulcahy, strategy and insight director, IMRG.

There are two aspects that will greatly influence the answer to that question – demand and culture, he adds. Much spend has been forced online, and often in an artificially-inflated way; a 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,” Mulcahy comments.

“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.”

Sign up for our free retail technology newsletter here.