“2019 could prove to be a very challenging year”

Poor online retail sales growth continued into January this year, following December’s all-time low sales figures, according to the IMRG Capgemini eRetail Sales Index.

January’s online sales were up by seven per cent year-on-year, which was almost half of last year’s figure (which was +13.9 per cent YoY).

“One area where we are seeing a big impact is electricals, with continued YoY declines…” Read more below…

Last month’s growth was actually marginally above the three-month average of +6.3 per cent (YoY), but that was largely due to December’s record-low performance.

Electricals was highlighted as an industry sector that suffered in January, with sales recorded at -19.1 per cent.

Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini, said: “January growth was half that of last year and below the five-year average for the month, failing to recuperate sales from the poor performance in December 2018.

“The cautious start to the year is unsurprising given that pressures on the retail sector remain high as a result of further store closure announcements, continued low consumer confidence and economic uncertainty as we hold our breath, and our spending, ahead of further news on how the UK will exit the EU.

“One area where we are seeing a big impact is electricals with continued YoY declines, often correlated to the confidence index, coupled with decreasing basket values there is an indication that customers continue to hold back on spending, especially in the more luxurious and higher ticket categories.”

Andy Mulcahy, strategy and insight director, IMRG, added: “2019 could well prove to be a very challenging year, and the January growth was a slight improvement on the recent difficult trading conditions.

“The discounting that has been rife since all the way back in July continued into January as expected due to post-Christmas clearance – the challenge for retailers now is how to ease off the reliance on discounting for driving sales.

“As we’ve moved into February, many sites have either switched off discounting or lessened the prominence of such offers.”