Online sales of beers, wines and spirits in the UK fell by more than a fifth in August compared with the same period last year, a recent report has found.
According to the latest IMRG Capgemini Online Retail Index, which tracks online sales for 200 retailers, beers, wines and spirits saw a 20.6 per cent drop in online sales in August – one of the biggest category declines.
Andy Mulcahy, strategy and insight director, IMRG (Interactive Media in Retail Group), said that it’s been a “difficult summer for online retail”, with many retailers apprehensive about how performance is going to be over peak trading.
“The hope is that the energy cap announcement will do something to boost shopper confidence a bit before we get into November, but even then, the omens are not good.
“Usually, the amount of money spent online increases and decreases interchangeably in line with activity retailers undertaking, but across July and August we recorded five weeks of decline, which is rare; there will need to be a great deal of sales growth to make up for Black Friday and peak to be positive,” Mulcahy said.
Overall online sales fell by 4.1 per cent year on year in August 2022. This marked the 17th month in a row of declining sales since May 2021.
Since January 2022, online retail sales have dropped by 14 per cent, with “plenty” of categories falling behind on online sales growth expectations, according to IMRG.
As the cost of living increases, the firm warned the outlook for the remainder of 2022 was “fairly bleak”.
Simon Binge, commerce senior manager, customer transformation at Capgemini, said, “As we come to the end of a largely disappointing summer from a growth perspective, the focus turns to a critical peak trading period. While the prospect of promotional activity around Black Friday, the Fifa World Cup and Christmas should tempt shoppers to part with their hard-earned cash, retailers will continue to struggle with balancing rising costs and enticing discounts.
“We can see from Q2 [second quarter] that retailers are already being cautious with promotions, with only 33 per cent of sales being generated by promotional activity or discounted price, versus 42 per cent during the same period last year.
“With this in mind, retailers will need to explore other opportunities for increasing orders and basket value outside of deep discounts,” Binge said.
The Covid-19 pandemic accelerated the development of the alcohol e-commerce channel. Earlier this year, spirits distributor Proof Drinks reported triple-digit growth for its 2021-22 full financial year, driven by its e-commerce sales.
Meanwhile, new research suggested stronger online age verification checks are needed for alcohol purchase.