December online retail sales surge 9.4%

UK online retail sales growth spiked by 9.4% year-on-year in December 2019, according to the latest IMRG Capgemini Online Retail Index.

The report said online retail “defied” forecasts of poor turnouts during the festive season, with Q4 recording a growth rate of 11.3%.

This was largely boosted by November’s peak performance of +16.4% and the slightly later Black Friday sales period.

However, despite a good Q4 IMRG and Capgemini said the “final surge” was not enough to save online retail from the lowest annual performance seen on record.

Whilst the stronger year-end figures boosted growth in the second half to +7.6%, a series of “disappointing” results during the first nine months of the year contributed to a “discouraging” growth rate of just +6.7%.

Andy Mulcahy, strategy and insight director at IMRG, said: “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.”

He added: “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.”

Lucy Gibbs, managing consultant – retail insight at Capgemini, said: “The welcome boost in spend over the festive period after a somewhat subdued year was in fact a mixed story online.

“There was also a notably stronger performance by pure online only retailers in comparison to the more traditional players, who failed to seize the growth when they perhaps need it most, leading to a total growth of +4.8% this year against last year compared to a more healthy +10.0% for online only.”

She added: “Budget retailers also enjoyed a good year, taking advantage as consumers hunted out the best deals and outperforming both mid-tier and premium in the final quarter, though average basket value did fall 25% over November and December as a result. There is some hope however, as consumer confidence lifts a little, up +3 points in December; could the final quarter growth indicate a more favourable climate as we move into 2020?”