UK e-commerce sales up 72% as pandemic drives consumers online

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E-commerce sales were up 72% year-on-year in the UK in May according to Mastercard SpendingPulse, which tracks overall retail sales across all types of payment, including card, cash and cheque. This is an advance on April’s online sales – which were up 64% year-over-year, showing an ongoing growth trend as consumers continue to shop online during the pandemic.

To dig into this further, Mastercard has released the first report, The Shift to Digital in its Recovery Insights series, which sheds light on the impacts of the pandemic and stay-at-home orders, including the incredible growth of online shopping.

In the UK, total retail sales for May were down 13.6% year on year while e-commerce sales were up 72.3%, according to SpendingPulse, underscoring the broader shift to digital in how we work, live and shop.  Indeed, during April and May 2020, e-commerce as a share of total retail sales reached 33% in the UK – an unprecedented high.

Additionally, consumers are focusing more on consumer staples versus spending on luxury. UK SpendingPulse retail sales estimates for May show e-commerce spending on groceries increased by 76% year-on-year. By comparison, e-commerce luxury decreased by 14% year-on-year during that same time.

A few sector specific trends stand out. First, beyond the clear surge in groceries, spending on interior furnishing has seen the most profound shift to digital as consumers stay indoors and rethink
how they spend more time in their homes.

Second, restaurants have experienced a rapid digitalization, accelerating an already existing secular shift. Third, with shelves missing toilet paper, paper towels and in some cases food, consumers have opted to stock up at e-commerce discount stores.

“There has been an undeniable shift to online shopping over the past two months,” says Janne Karppinen, Head of Retail at Mastercard “The question is whether these trends will continue for the long-term. We’ve seen some redistribution of sales away from the High Street into online channels and this could have a huge impact on how retailers blend their online and physical footprints in the future.”

Globally, we are seeing a great divide of in-person spending channels relative to the impressive strength of e-commerce spending. In the US, the SpendingPulse weekly report indicates total retail spending through e-commerce channels accelerated for eight continuous weeks between March 21 through May 9 – an unprecedented climb nearing 100% growth year-over-year.

While stay at home orders created a greater demand for digital commerce, we note spending growth was also bolstered through the distribution of stimulus and unemployment insurance.

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