Online sales growth slows to pre-pandemic levels

Online sales have slowed down to pre-pandemic levels, according to new analysis from the IMRG’s online retail index.

The analysis attributed this to lockdowns, during which huge volumes of orders were made online. In 2019, growth for the total online market was up 5% year-on-year, while in 2020 it increased by 35%. 

The IMRG’s analysis, which tracked online sales for 200 retailers on a sample size of £23bn in 2022, found that the growth of online sales has been negative each month since April 2021. 

By the end of 2022, online sales were down 10.5% year-on-year, however the comparison of non-lockdown against lockdown periods “made it hard to determine how things have actually changed”, according to the IMRG.

Nevertheless, when the value of the index in 2022 is compared against 2019, the overall market is up by 17%, which averaged out over those three years, represents an average rate of 5.7% growth per year. This is firmly in line with the pre-pandemic growth rate. 

Andy Mulcahy, strategy and insight director at IMRG, said: “From an online retail value perspective, we might ask ‘pandemic, what pandemic?’ There was a train of thought that suggested existing trends had been accelerated by a decade in the space of a few weeks, but it has become apparent that we are creatures of habit and change simply doesn’t happen at that scale, at that speed. 

“It is probably fair to say that the market is a bit better off than might have been expected if there was no pandemic; the rate of growth had been generally coming down over a period of years so it could have run at lower than +5% per year otherwise.”

He added: “The cost-of-living crisis has caused a real shift in shopping behaviour, with conversion on retail sites dropping away markedly throughout 2022. If there was no Ukraine conflict, could more of that volume have been retained? We’ll never know of course, but the impact of the lockdowns on online retail now looks like a historical blip.”