UK Online Spending Falls 2.9% in March to £8.2 Billion as Groceries and Other Essential Items Spike 9.1% in Price Year-Over-Year

I’m pleased to introduce you to the Adobe Digital Economy Index (DEI) which uses Adobe Analytics to analyse tens-of-billions of visits to retail sites from UK consumers. Each month we will report on consumer online spending, share insights on key trends and identify opportunities for businesses to keep up with evolving customer expectations.

This latest data reveals that UK shoppers spent £8.2 billion online in March 2023, a drop of 2.9% compared with February 2023 and 10.5% year-over-year (YoY), as UK consumers were reminded of the economic challenges facing the UK in the Government’s Spring Budget.

Consumer spending levels were down 6.6% YoY during the first two-weeks of March (prior to the budget), and down 13.9% YoY in the two-week period after the Budget announcement.

The optimistic long-term outlook reported by the chancellor is yet to be reflected the pricing of everyday items. In March, consumers faced significant increases in the prices of essential items such as groceries (up 9.1% YoY) and pet products (up 13.7% YoY), leading shoppers to turn to Buy Now Pay Later services to manage their daily spending.

Consumers continue to lean on unsecured credit

Continuing the trend from the first few months of 2023, Adobe Analytics data found that consumers were still making use of Buy Now Pay Later services to spread the cost of their online purchases.

Buy Now Pay Later was used in 14% of all online purchases in March, on par with figures from February 2023, equating to £1.2 billion worth of orders. The average order value for Buy Now Pay Later purchases also rose by 1% compared with February 2023.

Purse strings tighten as essentials spike in price

Consumer spending power faced increased pressure in March as the online price of essential items also rose sharply, with groceries costing 9.1% more than they did last year, and pet products costing 13.7% more.

In contrast, non-essential items such as sporting goods and home and garden products decreased in price compared with March 2022, with the biggest price drops coming in toys (14.4% cheaper) and electronics (11.9% cheaper).

The shift towards the digital economy however, continues at pace with UK consumers spending 29.2% more on online purchases compared with March 2020, when Covid restrictions on retail came into effect.

That increase represents an 8.9% annualised growth rate over the last three years.

Mother’s Day drives growth

As consumers prepared for Mother’s Day, this month products such as dressing gowns, silk pillowcases and sleeping masks, and flowers were all popular – with data showing that spending accelerated in the lead up to Mothering Sunday.

Mobile remains the dominant digital shopping channel

The trend towards mobile shopping is continued, with March seeing even more spending coming from the palm of consumers’ hands. 3 in 5 (57.1%) of purchases were made using smartphones, representing a 4.7% YoY increase in share.

Overall, consumers spent £4.7 billion with their mobile devices in March.

Click and Collect usage remains elevated

This fulfilment method was used in 8.7% of online orders in March (for retailers who offered the service), down slightly from 8.9% the previous month, but up from 7.5% in the year prior.

About the Adobe Digital Economy Index

The Adobe Digital Economy Index (DEI) used Adobe Analytics to analyse tens-of-billions of visits to retail sites from UK consumers, 100 million SKUs, and 18 product categories in the period March 1st to March 31st 2023, to provide the most comprehensive view of the UK digital economy. Adobe Analytics is part of Adobe Experience Cloud, relied upon by major retailers to deliver, measure, and personalise shopping experiences online.

Global figures are based on analysis of over a trillion visits to ecommerce sites and direct transaction data of consumers from over 80 countries – more than any other technology company or research firm.