Online sales rise for mid-market retailers as shoppers prioritise quality over low cost bargains

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Shoppers are prioritising product quality over cheap bargains as the cost of living crisis bites, reveals the latest IMRG Capgemini Online Retail Index.

Since March, online sales for budget retailers have fallen -16 per cent year-on-year (YoY), while premium retailers (-9 per cent) and their mid-market counterparts (-5 per cent) have fared significantly better.

This is particularly the case for mid-market retailers, who saw positive growth in July at +4 per cent and +1 per cent in June.

Analysing the Average Basket Value (ABV), the rise in spend for mid-market goods between January (£106) and July (£146) suggests Brits are unable to let go of high quality items. Many are instead compromising with mid-market options in an attempt to balance new budget constraints. More movement in general within the ABV for both the premium and mid-market categories also points to discounting being used as a tactic to boost sales – something budget retailers have little scope to do.  

Simon Binge, commerce senior manager, customer Transformation at Capgemini, comments: “With mounting economic pressures and very little positive news on the horizon, it’s telling that UK consumers are opting for quality compared to price in the value equation. While there are signs of trading down, consumers are still unwilling to compromise on quality and are being helped by discounting in higher price points. It remains to be seen, however, whether this behaviour – and retail promotional activity survives the potential worsening of economic conditions in autumn and beyond.”