IMRG Online Shopping Index – Online Retail Sales Drop 12%

International software engineering firm IMRG’s Online Retail Index showed that online retail revenue growth fell 12% year-on-year.

With the end of pandemic restrictions, it looks like the boom that many online retailers have enjoyed for two years is over. IMRG’s director of strategy and insight, Andy Mulcahy, said the online retail space is “not in the healthiest space.”

Despite this, the average basket value (ABV) reached record highs, peaking at £146 in April. ABV clothing orders were up 10% to £80 in the last quarter compared to a year ago. Overall, the sector grew by 4.2% and as such is the only segment of e-commerce to experience growth.

All other categories saw negative growth – electricity fell 17.8%, home and garden 22.8% and health and beauty 32.8%. As the UK emerged from the pandemic, its population was hit by high price inflation and a concomitant crisis in the cost of living. This will likely lead to a drop in both online and offline shopping. The IMRG figures are an index of future trends.

Many last-mile delivery companies have invested in massive additional capacity in both labor and infrastructure, and we’ve already seen this overcapacity hit earnings in recent quarterly financial reports. With retail collapsing, this may well impact the entire industry for some time to come.

Anne G. Cash