Online retail spending soars

18 July 2008

The increasing tendency for consumers to use the internet for their shopping was further showcased by news that online retail sales in Britain soared 38% in the first half of this year - accounting for 17p in every £1 spent.

The IMRG Capgemini e-Retail Sales Index, which carried out this report, believes this figure could rise to as high as 50p in five years.

The index also shows that consumers spent over £26.5 billion pounds online in the first six months of the year - equivalent to half of all supermarket sales and greater than all retail sales for clothing and footwear.

Online sales now account for almost 20% of total retail spending, further highlighting the burden rising food and fuel bills are having on shoppers, who are beginning to shy away from the high street in search of their bargains.

Technology consultancy Capgemini believes that this figure will rise to around 30% to 50% in the next five years, leading many firms to question the viability of their stores.

Clothing and footwear sales were the biggest leaders in online improvement, with clothing up 32%, lingerie up 37% and footwear up 38%.

This latest report supports figures for June which showed shopper numbers were down 2.6% year-on-year at major locations such as the South-West, Wales, Scotland and Yorkshire region, while out-of-town shopper numbers declined even further - down 5.8%. This was in stark contrast to UK internet traffic to retail websites, which was up 6.5% on the year, with trends showing that shoppers are searching for "sales" at the highest rate since Christmas.

Despite outperforming store group sales, the internet does not remain immune to the credit crunch. Total online sales fell 5% in June - the first year-on-year decline for that month since 2005.

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