Online retail spending stutters after England World Cup exit

  • Sales increase of +10.0% YoY in July – lowest growth to date in 2018
  • Online-only outperformed multichannel retailers (+13.7% vs. +8.4%)
  • Overall market conversion rate of 4.7%, compared to 5.8% last year
  • Clothing growth falls below 5-year average (-7.5% YoY)

LONDON UK – 21 August, 2018: UK online retail sales slipped to their lowest year-on-year (YoY) growth in 2018 so far this July, as consumer spending slumped in the weeks following England’s FIFA World Cup exit, according to the latest IMRG Capgemini e-Retail Sales Index. Online sales increased by just +10.0% (YoY) in July, well below the three, six and twelve month rolling averages of +14.7%, +15.0% and +12.7% respectively.

Online retail enjoyed record growth in the first half of 2018, and this looked set to continue after the first week of July, with sales up by +14.4% (YoY). After England’s semi-final exit on 11 July, however, this took a dramatic turn, and even Amazon Prime Day could not prevent growth shrinking  to +3.7%, +8.6% and +5.1% in the remaining weeks of the month.

The Clothing sector appeared most affected by the slump, experiencing its lowest YoY growth (+7.5%) of the year, which was also below the 5-year average of 11.8% This incorporated the most significant decreases seen in Footwear (-30.6% YoY) and Accessories (-13.4% YoY) since 2013. The heatwave did bring relief to Garden however, which built on its staggering +49.9% (YoY) growth in June to record a +22.4% (YoY) sales increase in July.

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Bhavesh Unadkat, principal consultant in retail customer engagement, Capgemini: “A few factors contributed to the fall in online customer spending this month, but significantly last July saw a peak in conversion rate due to activity around Prime day – something that was not repeated this year. Combined with the decrease in overall site views and the highest increase in July basket value in over five years, it suggests that retailers have had to focus less on discounting and clearance; an effect of lower price-points throughout the year due to the competitive nature of the high street combined with good weather driving early summer spending.

“This month’s slowdown could also serve as a reality check for the outlook ahead. GFK has reported a decline in consumer confidence Index this month, and the Major Purchase Index decreased two points to -2. The interest rate hike could also impact the amount of disposable income people have to spend, while consumers are being more cautious after high credit card spend over the summer. After the boost from this summer’s sunshine and events, retailers need to focus hard on winning the battle for spend and share of wallet, as H2 will be highly competitive with a less transactions ringing through the ‘online’ tills.

Andy Mulcahy, strategy and insight director, IMRG: “The British weather is often the cause of much misery or joy for British retail, and July was no different. The main beneficiary of the prolonged heatwave in July was the garden sector, with 22.4% year-on-year growth, which is in contrast with recent difficulties experienced by some on the high street. Shoppers keen to capitalise on the sunshine focused their attention on gardening products – which was also to the detriment of the home sector, which reported a year-on-year decrease of 5.8%. The positive weather, which started in May, has transformed the garden sector’s 2018 performance into an impressive 24.5% year-to-date growth.


About the ‘IMRG Capgemini e-Retail Sales Index’

The IMRG Capgemini Index, which was started in April 2000, tracks 'online sales', which we define as 'transactions completed fully, including payment, via interactive channels' from any location, including in-store. 

About IMRG

For over 20 years, IMRG (Interactive Media in Retail Group) has been the voice of e-retail in the UK. We are a membership community comprising businesses of all sizes – multichannel and pureplay, SME and multinational, and solution providers to industry. We support our members through a range of activities – including market tracking and insight, benchmarking and best practice sharing. Our indexes provide in-depth intelligence on online sales, mobile sales, delivery trends and over 40 additional KPIs. Our goal is to ensure our members have the information and resources they need to succeed in rapidly-evolving markets – both domestically and internationally. 

About Capgemini

A global leader in consulting, technology services and digital transformation, Capgemini is at the forefront of innovation to address the entire breadth of clients’ opportunities in the evolving world of cloud, digital and platforms. Building on its strong 50-year heritage and deep industry-specific expertise, Capgemini enables organizations to realize their business ambitions through an array of services from strategy to operations. Capgemini is driven by the conviction that the business value of technology comes from and through people. It is a multicultural company of 200,000 team members in over 40 countries. The Group reported 2017 global revenues of EUR 12.8 billion.

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