UK’s online sales of alcoholic drinks hit low margins of 20.6% in August: IMRG

UK – Online sales of beers, wines, and spirits in the UK fell by 20.6% in August compared with the same period last year, according to the latest IMRG Capgemini Online Retail Index.

IMRG Capgemini Online Retail Index, which tracks online sales for 200 retailers, beers, wines, and spirits saw a 20.6% drop in online sales in August, one of the biggest category declines since the period of the Covid-19 pandemic that accelerated the development of the alcohol e-commerce channel.

Since January 2022, IMRG said online retail sales have dropped by 14%, with ‘plenty’ of categories falling behind on online sales growth expectations.

Earlier this year, spirits distributor Proof Drinks reported triple-digit growth for its 2021/22 full financial year, driven by its e-commerce sales, however, the firm noted that from the start of the second quarter, retailers are already being cautious in the online sale.

The survey shows that only 33% of sales were generated by promotional activity or discounted prices, versus 42% during the same period last year.

With this in mind, IMRG suggested that retailers will need to explore other opportunities for increasing orders and basket value outside of deep discounts.

Andy Mulcahy, strategy and insight director, IMRG said: “Usually, the amount of money spent online increases and decreases interchangeably in line with activity retailers undertaking, but across July and August we recorded five weeks of decline, which is rare; there will need to be a great deal of sales growth to make up for Black Friday and peak to be positive.”

As the cost-of-living increases, the firm warned the outlook for the remainder of 2022 was ‘fairly bleak’, owing to the high inflation being experienced in the country but it was hopeful the energy cap announcement will do something to boost shopper confidence a bit before November.

Stronger age verification is needed for alcohol e-commerce

Meanwhile, new research suggests stronger online age verification checks are needed for alcohol purchases.

The research carried out by charity Alcohol Change UK and Wales-based Wrexham Glyndŵr University reveals that online age verification checks for alcohol purchases are ‘insufficient’, and the industry is ‘struggling to effectively protect underage people.

According to the study, the value of e-commerce alcohol sales is projected to grow by 74% between 2020 and 2024 but found Licensing Act, which came into effect in 2005, and was written before online alcohol sales boomed, to be outdated legislation.

A test purchase operation was carried out, which found that in 72% of cases where alcohol was ordered for delivery within two hours, bottles were handed over without deliverers seeking proof of age.

Additionally, delivery drivers were also found to be confused about different retailers’ policies on age verification, some retailers rely on credit cards to prove the purchaser is an adult, according to Alcohol Change UK.

Alcohol Change UK claimed developments in technology mean people can now accurately prove their age online, giving retailers assurance they are not selling to underage people.

The Systems can use verified identity credentials integrated into the checkout process to enable customers to prove their age online.

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