Customers deliver worst year ever for online retailers

ONLINE retailers suffered their toughest year ever in 2022 as shoppers tightened their belts in the face of soaring prices.

UK online sales fell 10.5pc in 2022 compared with the previous year, according to business group IMRG.

This is the biggest drop since records began at the start of the millennium and also the first time sales have fallen on an annual basis since 2000.

Andy Mulcahy, a director at IMRG, said double-digit price rises meant cautious consumers had shunned purchases of non-essential items. While the average checkout value among the 200 retailers tracked by IMRG rose 10pc to £134 in 2022, the number of people buying items fell by up to a fifth.

Millions of families are grappling with soaring energy bills and housing costs, with the Bank of England and Office for Budget Responsibility both predicting the UK will remain in recession this year.

Inflation, as measured by the consumer prices index (CPI), stands at 10.7pc, with food prices up 16.4pc in November compared with a year ago.

“Retail is a confidence game,” said Mr Mulcahy. “If people feel they are comfortable with their finances and have some disposable income to play with, then retailers tend to see that reflected in general patterns of demand. So, it really has been a poor year.”

Mr Mulcahy said the number of people browsing online had continued to increase, suggesting that the “general economic malaise” was not becoming entrenched. However, he added: “The issue is many are expecting a tough year in 2023, with the first half, in particular, unlikely to provide much respite.”

It came as the average rate for a credit card hit 30.4pc, up from 26.2pc a year ago, according to the analyst Moneyfacts. It is the highest level since it began compiling data in June 2006.

Credit purchases spiked before Christmas, with consumers spending £1.2bn in November, three times higher than the preceding month, according to the Bank of England.

The increase came despite retail sales dropping by 0.4pc in November, as energy, food and housing costs rose.