Online fashion sales achieved a record low level of growth in May, as the snap general election and rising inflation took its toll on consumer confidence.
According to the IMRG Capgemini eRetail Sales Index, online clothing sales achieved a growth of +7.6% which is the lowest rate of growth recorded in this history of the Index, which began in April 2000.
Overall online retail sales achieved a growth of +10.2%, which was the lowest rate of growth since October 2015 (when it was +8.7%). Historically the Index has always shown a slowdown in growth prior to a general election but inflation rising to 2.9% in May, as retailers pass on their increased input costs due to the weakness of sterling, is also likely to have been a factor.
IMRG editor Andy Mulcahy said it would now be watching carefully to see how consumer confidence fares now the election has resulted in a hung parliament. “Shopper confidence tends to take a hit just before an election so, while the fact we were actually having a general election may have been a surprise, a drop in online retail sales growth preceding it is not,” he said.
“Growth usually rises again soon afterwards – even in July 2016, the month after the Brexit vote and all the uncertainty that came with it, sales were up +18.6%. The issue this time is that we now have a hung parliament, which leaves all political options still available, including the potential for yet another general election in the near future. 2017 is certainly turning out to be a very challenging year for retailers to navigate,” Mulcahy added.