Online spending falls by 17% in second quarter of year

business
Online Spending Falls By 17% In Second Quarter Of Year Online Spending Falls By 17% In Second Quarter Of Year
Consumers are returning to in-person shopping after an exclusively online environment during the peak of the pandemic. Photo: PA
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By Cate McCurry, PA

There has been a 17 per cent decline in online spending in recent months, reflecting a return to some pre-pandemic habits, a new report reveals.

The latest AIB Retail Spend Outlook report found that customers resumed spending on occasions and events in the second quarter of this year.

Overall sales between April and June remained stable, recording a modest 1 per cent decline year-on-year.

The value of in-store sales saw an increase of 5 per cent on last year compared with a decline of 17 per cent in the online channel.

The value of in-store sales saw an increase of 5 per cent. Photo: Luke O’Reilly/PA

The report said this movement between in-store and online spending came at a time when Covid-19 restrictions on some elements of the retail sector were removed in mid-May, allowing greater access to in-store shopping.

With rescheduled weddings happening this year, clothing and beauty sales bounced back significantly.

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In particular, categories such as cosmetics, dresses, shoes and men’s formal wear saw large increases in spending.

Clothing saw the most dramatic increase, with the overall category up 13 per cent on last year.

This includes a very significant change in consumer behaviour, with a 55 per cent rise in in-store sales values and an 18 per cent fall in online sales.

Reverse in pandemic trends

However, the report also found that many trends have reversed compared with a year ago.

As more people returned to the office and hybrid working, the demand for electrical items slowed, and as hospitality has opened up, sales in grocery stores dropped 2 per cent, electronics fell by 18 per cent and off-licence sales were down 19 per cent.

Commenting on the report, AIB’s head of retail sector, Alan Makim, said: “The second quarter this year did not see Covid-related restrictions, which had remained in place into early May last year.

 

“The data shows evidence of some behavioural changes, such as consumers returning to in-person shopping after an exclusively online environment for some parts of the sector in the first half of last year.

“While the data shows some positive elements, it also suggests an element of caution among consumers, given the current inflationary environment, which will likely have an impact on the discretionary spending power and attitudes of consumers as we look forward to Q3.”

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Duncan Graham, managing director of Retail Excellence Ireland, said: “As the quarter came to an end, the summer sales started earlier and further discounts were added to clear stock.

“Further price increases are expected into the autumn as manufacturing, shipping, energy and labour costs all continue to increase.

“More government measures will be needed to assist businesses in managing through a difficult trading period.”

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