With the news in recent weeks that Amazon has swung to a loss and Shopify has sacked one in ten employees, new data shows that the ecommerce boom seen during the pandemic may finally be coming to an end.

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The pandemic-fuelled acceleration of ecommerce has started to roll back

Late last week, Canadian ecommerce firm Shopify announced it would be losing 1,000 employees – a tenth of its entire workforce – to redundancy after founder Tobi Lütke said the business made the “wrong” bet on the long-term growth of online retail post-pandemic.

The announcement came the day after US giant Amazon announced it had swung to a loss in the quarter, and in the same week that Ocado said it would be launching a new business unit aimed at offering its technology services to retailers beyond its core grocery market. 

Three separate data points – from IMRG, the British Retail Consortium-KPMG sales monitor and Kantar – covering the period from January 2018 to July 2022 highlight both the pandemic-driven acceleration of ecommerce growth and the point at which it began to roll back


At the height of the pandemic, many experts suggested that ecommerce adoption in the UK had accelerated five or even 10 years. IMRG’s strategy and insight director Andy Mulcahy says the data post-pandemic doesn’t support that view. 

“Once stores opened again there was always going to be a rebalancing. ONS used to say the online share was in the 17-20% range depending on the month of the year, this went up to more like 30% during lockdowns but my guess is it will settle at more like 20-25%.”

Mulcahy says the pandemic produced “a notable shift, rather than a revolution” in terms of ecommerce penetration. While the war in Ukraine and the ongoing cost-of-living crisis may be artificially lowering ecommerce sales, they are still up compared with pre-pandemic levels.

The cost-of-living crisis and normalising customer behaviours in terms of returning to shopping in store has also hit online food sales. 


Consumer insight director at Kantar Eden Plummer says that while ecommerce sales have tailed off from the pandemic highs seen in mid 2021, the overall market share has increased. 

“Online really took off throughout the pandemic. What we’ve seen now is that, since about March, online share hasn’t really moved. It’s really flattened out – currently around 12% of total food sales. It’s still quite an important channel for some customers and it won’t go away any time soon.”

The BRC-KPMG sales figures show that non-food online sales peaked at the beginning of 2021, before slumping to a five-year nadir 12 months later, as international supply chain issues and rising prices in certain categories saw consumers turn away from online sales. 


KPMG’s UK head of retail Paul Martin says that retailers will need to balance protecting margins on the one hand by passing on price rises to consumers while negotiating with suppliers to balance cost increases. 

“Cost and efficiency will dominate retailers’ agendas as they are forced to make some tough decisions on which products make it to the shelves in order to remain price competitive for consumers.”

While the drivers that saw ecommerce sales swell during the pandemic are coming to an end, overall online sales are higher across the board post-Covid compared with pre-pandemic.