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News - 18 March 2011

Online spending continues to grow despite recession

The latest figures from the IMRG Capgemini e-Retail Sales Index show that shoppers in the UK spent a total of £4.9 billion online during February, equivalent to £79 per person - a 20% increase on the same period last year.

Set against a backdrop of diminishing sales on the high street this is alarming news for any retailer who still does not have an ecommerce enabled web site.

The areas of strongest growth are in clothing, footwear and accessories. This is perhaps an indication that the barriers to buying items that need to be touched and felt are breaking down. This intensifies the threat to our already fragile high streets.

In stark contrast to recent reports that indicated the high street suffered its weakest sales growth for two years, British consumers have spent £10 billion online during January and February, far exceeding earlier expectations.

Over the Christmas period online sales grew by 26% while the high street hit a 15 year low with a fall of 7%.

Alcohol sales saw a massive increase in February up 37% on January and 25% on February 2010.  The impending rise in duty in the forthcoming Budget later may be partly responsible for this increase.

The clothing sector saw a significant rise, with year-on-year growth reaching 34%. Perhaps this is an indication that more and more people are getting used to the idea of trying on at home and returning things that don't fit.

Chris Webster, head of retail consulting and technology at Capgemini said, “February was a good month for online retail, up 20% on the same period last year. This increase is on the back of a very solid second half to 2010 and whilst some of the growth can be attributed to a weak start last year, nearly £5 billion spent online is very significant and in stark contrast to the weak sales experienced by the traditional bricks and mortar retailers.”

Tina Spooner, Director of Information at IMRG commented, “The February Index results paint an optimistic picture for the e-retail market, especially when compared with the poor performance of traditional retail sales last month. UK shoppers spent a staggering £10bn online during January and February, a clear indicator of how strong consumer confidence is in the online channel even during a period in which high street spending is down.”

High street retailers really do need to start thinking outside the box if they hope to continue to attract people into town. Brighton is perhaps ahead of the game in this respect with it unique retail offer, particularly new shops like Garra Rufa, where you can have your feet nibbled by fish and Holister where you experience life on the ocean wave.

Read related items on:
Retail, pubs, clubs and restaurants
Spooner, Tina
Webster, Chris

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