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Hot weather drives strongest April to May growth in 10 years

The IMRG Capgemini eRetail Sales Index has revealed online sales growth of 17% year-on-year (YoY) in May, the highest growth rate witnessed since June 2015. The positive results suggest that the arrival of the hot weather had a more significant influence on shopper spend than uncertainty around the outcome of the impending EU referendum.

With an exceedingly strong performance for e-retail in May, the Index also recorded its highest month-on-month (MoM) growth rate between April and May for over 10 years. An increase in the average basket value – from £78 year-to-date in 2015, to £81 year-to-date in 2016* – was also realised.

Online sales in the garden sector surged 55% YoY following a 27% YoY decline in May 2015. This was in part down to the hot weather, which also helped to drive online sales in the clothing sector where sales grew 24% YoY. This was the highest annual growth in nearly three years as consumers headed online to renew their summer wardrobes. Despite the warmer weather experienced in May, which traditionally lends itself to an increase in alcohol sales as people enjoy barbeques and picnics, online sales of beers, wines and spirits actually showed a decline of 3% YoY.

The annual growth in sales via smartphones continues to significantly outperform those made by tablets, with 79%* growth for smartphones and 5% for tablets in May.

Bhavesh Unadkat, Management Consultant in Retail Customer Engagement Design, Capgemini: “It was great to see the Index recording a solid performance for online retail in May 2016, up by eight per cent on an indifferent April 2016 performance and up 17% on the year.  The country experienced record temperatures in May and this was reflected in the performance of the fashion and garden sectors, which both recorded significant growth.

“However, beers, wines and spirits surprisingly declined on the year, conflicting with the hot weather correlation. This was understandable as promotions were not as strong as last year with drinks retailers predominately pushing promotions into June in line with the Euros. We should expect this category to really fly as the summer progresses.  Father’s Day, the Euros, a hot summer, the Queens 90th and a summer of sport should all help to grow retailers’ confidence for the months ahead.”

Tina Spooner, Chief Information Officer, at IMRG: “Uncertainty around the EU referendum doesn’t appear to have had any impact on the UK e-retail sector, with the latest results from the IMRG Capgemini Index revealing strong growth in online sales during May.  It seems the fine weather last month helped boost online clothing sales, with annual growth reaching the highest rate observed in three years, while the garden sector saw a much-needed return to growth after 14 consecutive months of decline, with sales surging 55% compared with May last year.

“Year-to-date, online sales have grown 14.5%, well ahead of our 11% growth forecast for 2016, while sales via mobile devices continue to grow at twice the overall market rate.”

*Excluding travel retailers