Growth in online retail sales slowed to an all-time low in December, up just 3.6 per cent on the previous year, pointing to a drop in consumer confidence during the crucial Christmas trading period.

The latest figures from Capgemini and IMRG’s e-retail index revealed that on an overall basis, online retail sales were up 11.8 per cent on 2017, bolstered by events like the Royal Wedding and the World Cup, beating a start of the year forecast of nine per cent growth for the full 12 months.

December’s growth rate of 3.6 per cent year-on-year showed the lowest growth recorded in the whole of 2018, and continued a declining trend – falling below the final quarter (6.8 per cent), second half (8.4 per cent) and 12 month (11.8 per cent) averages respectively.

Furthermore, despite the Christmas shopping period, online spending in December was down 15 per cent on a month-on-month basis compared to November - a more significant tail off than the 11 per cent drop in online sales seen between November and December 2017.

As a result of the continued political and economic uncertainty related to Brexit, Capgemini and IMRG forecasted that growth on online retail will fall to nine per cent year-on-year this year - down from 11.8 per cent in 2018.

Andy Mulcahy, strategy and insight director at IMRG, said: “The first half of 2018 was actually very strong for online retailers – it resisted and arguably benefitted from the tough climate that impacted trade for store retail.

"It is only the second half of the year where the suppressed confidence and spend, evident in so many other sectors, has spread to online retail; the macro-economic situation must be exerting pressure here, particularly with Brexit now entering its crunch period in [the first quarter of] 2019.”

Bhavesh Unadkat, principal consultant in retail customer engagement at Capgemini, commented: “A sharp drop in online retail spending in December brought the rollercoaster of a year to a close, with the industry unable to recover performance in the vital festive period following a disappointing November.”

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