Last month saw the lowest rate of online retail growth ever recorded, according to new research.

The latest IMRG Capgemini Online Retail Index, which has been tracking the online market 22 years, found that in January e-commerce growth was down 24.4 per cent year-on-year. This fell well below the three, six, and 12-month averages of -16.4, -13.4, and -2.8 per cent respectively.

But the index, which tracks the online sales performance of more than 200 retailers, also found that average spend was up by more than £20 last month compared to January 2021.

Last year ended on 2.7 per cent total growth in the marker - the lowest annual growth rate ever.

The companies behind the index said that January's marked decline is "a direct result of retailers competing against a staggering growth rate of 61.8 per cent from January 2021, when the UK was in a lockdown".

“The first quarter of 2021 had a severe lockdown in place which drove huge online growth, so the year-on-year comparisons for the early months in 2022 are going to be harshly negative as a consequence," said Andy Mulcahy, strategy and insight director, IMRG. "This can make it seem like online sales are in freefall, whereas actually it is just a natural rationalisation of the 50-60% increases we saw this time last year.”

Fashion saw the highest rate of growth in January, with clothing up 5.4 per cent compared to the same period of 2021. The rest of the categories tracked by the index were not so successful. The areas with the poorest growth included skincare, which was down 48.2 per cent, makeup - which saw a decline of 45.7 per cent - and electricals which was also down 36.7 per cent.

“January was mixed story for retail; our Online Index reported the largest YoY fall in sales ever, and the high street claimed the opposite," said Lucy Gibbs, senior manager, retail lead for analytics & AI, Capgemini. "This is due to the now familiar Yin Yang effect on YoY revenues when comparing to last year’s lockdown store closures.

"As we emerge from the pandemic, the annual results will start to normalise and 2022 will hopefully bring a much more stable trading period, however the outlook still remains uncertain as we realise the fall out of economic and logistical challenges from the last two years."

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