The online retail industry recorded growth of just five per cent year-on-year in March, against a tough comparator last year, according to the latest IMRG Capgemini eRetail Sales Index.

While still positive growth, this subdued performance fell significantly below the three (up 7.5 per cent), six (up 7.1 per cent) and 12-month (up 10.2 per cent) rolling averages. In fact, online-only retailers saw only marginally better results - growing 8.9 per cent - than multichannel retailers’ five per cent rise.

Across the sectors, the impact of a late Easter was most apparent in home and garden, which saw its impressive growth trajectory from earlier in the year slow to just 1.6 per cent year-on-year.

Meanwhile, despite a strong performance in footwear (up 16.7 per cent), the clothing sector continued its five-month run of single digit growth (up 3.7 per cent), and both electricals and gifts saw sales plummet by 26 per cent and 22.1 per cent respectively.

In contrast, health and beauty had another strong month of sales - up 15.6 per cent year-on-year - with beauty outperforming the rest of the sectors with a 19.8 per cent increase.

Andy Mulcahy, strategy and insight director at IMRG, said that while on the surface five per cent growth may not seem very positive, there are two possible interpretations.

“On the one hand it looks bad as it’s below the three, six and 12-month rolling averages, it’s also the lowest of the first quarter of 2019. On the other hand, this growth is against a strong base from March 2018, which featured Easter and freezing temperatures that kept people away from high streets and boosted online sales in 2018.

“As Easter falls in April this year, the growth rate for that month will determine whether March’s performance can be considered good, bad or indifferent given those factors – not to mention the continuing general macro-economic pressures on retail,” he added.

Bhavesh Unadkat, principal consultant in retail customer engagement at Capgemini, said that many of the larger, often reliably robust, retailers also recorded low single-digit growth. “Closing out Q1, clothing now stands at 2.6 per cent growth, significantly lower than last year’s 13.9 per cent growth – this performance is a mix of supply outweighing demand, continued discounting and customers being cautious with spending.”

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