Home Business News The value of e-commerce sales slumped -7.7% YOY, despite second Prime event

The value of e-commerce sales slumped -7.7% YOY, despite second Prime event

by LLB Finance Reporter
18th Nov 22 2:23 pm

Retailers who are placing their faith in strong online sales this Christmas are likely to be disappointed, forecasts the home delivery expert ParcelHero.

New Office for National Statistics (ONS) retail sales figures show that the value of online sales fell by -7.7% in October against the previous year, and -0.7% against September’s lacklustre results.

That’s in contrast to stronger than expected High Street sales. Overall retail sales (brick and mortar and e-commerce combined) rose by 1.8% in value compared to September. However, September’s results were artificially stunted because many stores were closed for the Queen’s funeral. Actually, October’s overall sales volumes were down by -6.1% year-on-year.

ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘Some analysts predicted a rise in the value of online sales in October because Amazon staged a second major Prime event on 11-12 October. However, the event proved distinctly sub-Prime. The “Prime Early Access Sale”, as Amazon dubbed it, supposedly gave Prime members early access to Christmas bargain prices. However, shoppers were underwhelmed. The event saw the average spend drop from around £52 for July’s first Prime Day of the year, to less than £40 in October.

‘That’s reflected in today’s ONS retail figures. The causes are not hard to find. Putin’s war has increased household energy bills, while former Chancellor Kwasi Kwarteng’s now-notorious “KamiKwazi” mini-budget prompted the pound to plummet and forced up interest rates.

‘Because the pound fell against the dollar, the euro and the yen, retailers paid significantly more for goods from the US, Europe and Japan from late September. Consequently, they had less wiggle room to offer tempting pre-Christmas deals in October.

‘Today’s figures also show that online sales captured 26.1% of the overall retail market in October. That’s roughly the share they have held since May. That means that e-commerce traders can, at least, be reasonably sure the post-Covid slump in online sales has bottomed out.

‘However, October’s disappointing online sales results confirm our fears that consumers are now very reluctant to splash the cash and there will be a widespread slashing of families’ Christmas budgets. We believe Brits will spend £4bn less on food, gifts and entertaining over the entire Christmas season, as people face unprecedented household bills and soaring inflation.

‘Compounded by the current strain on delivery services, we won’t be surprised if retailers economise by bringing forward their final order dates as Christmas approaches. That’s why our continually updated Christmas deadlines tool is so useful for keeping shoppers in the know with all their favourite retailers’ final order dates.’

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