E-commerce United Kingdom: +6.7% in 2019

Online retail sales growth in the United Kingdom spiked to +9.4% year-on-year (Y-o-Y) in December 2019. This brings last year to a positive close with a surprisingly strong Christmas trading period, according to the latest IMRG Capgemini Online Retail Index. 

This index tracks online sales performance of over 200 retailers in the UK. Online-only retailers performed significantly better than their multichannel counterparts, with sales growth of +10% versus +5.9%. Online retail defied forecasts of poor turnouts during the festive season, with Q4 recording a growth rate of +11.3%. This percentage was largely boosted by November's peak performance and Black Friday sales period. The December period fell sharply versus November (-20% month-on-month (MoM). This was the greatest December decrease since Black Friday first really grabbed widespread attention in the United Kingdom in 2013.

Despite this good last quarter, the final surge was not enough to save UK online retail from the lowest annual performance seen on record. This is largely due to the low performing first half of 2019., with a growth rate of just 6.7%.

Peeking into the results

Looking into the United Kingdom product sales, breaking down the results for December shows some more positive performances in a number of categories. Health and Beauty increase by a huge +45.1% while clothing was up +9.5%. Electronics saw their sales rise to +11.9%, marking their first positive growth since November 2018. So, as some product categories had a strong year-end, Capgemini also noticed an overall Average Basket Value decrease of 22.5% compared to 2018.

Strategy and Insight Director of IMRG, Andy Mulcahy comments: “If online retail in 2018 was characterised by strong growth in the first half and weak in the second, 2019 is the year when Black Friday quite possibly papered over retail’s cracks. Demand was low earlier in the year, particularly over summer, and growth for the year was running at just +4.9% up to October. A solid December, albeit against weak Year-on-Year growth in 2018, off the back of an explosive November have made the full-year result look much better at +6.7%; lower than our forecast of +9%, but nowhere near as bad as it was looking a few months’ back.

So, where does that leave retail heading into 2020? The final quarter has been a lot more positive for online sales growth than it has looked for a long time, plus we’ve had the election and Brexit should actually, finally, become something. There are also major sporting events galore in 2020 which could stimulate retail spending. Have we turned a corner then, or is it the case that the fundamental problems affecting retail are still yet to be solved in any meaningful way? Time will tell.”