E-spending soars to 'record £46bn'

Internet shopping made up 15p in every £1 of retail spending during 2007, a report out today says.

Internet shopping made up 15p (20c) in every £1 (€1.30) of retail spending during 2007, a report out today says.

The surge in e-commerce came at the expense of traditional high street stores, according to the e-retail sales index.

Internet spending soared to a record £46.6bn (€62bn) in 2007 – a 54% increase on 2006.

The Interactive Media in Retail Group (IMRG) said 15% of all retail spend was online in 2007.

That was more than double the British Retail Consortium (BRC)’s data which said online sales accounted for 6% of retail spending.

A pre-Christmas surge meant £15.2bn (€20.3bn) was spent online between October and December alone in 2007, according to the e-retail sales index released jointly by the IMRG and analysts Capgemini UK.

The year-on-year e-retail increase for December was 49.5% compared to virtually flat high street sales.

But the credit crunch also hit e-retailers who reported a sales increase of just 0.2% between November and December 2007.

Electrical goods were one of the most popular e-retail sectors, with sales up 60% last month compared to December 2006.

High street retailers who also sell their goods online appear to be benefiting most from the rise of e-commerce, according to the index.

IMRG CEO James Roper said traditional retailers who did not sell online were losing out.

“Virtually all the growth in retail is now online. There is no growth anywhere else and it is taking more and more business from the high street to online channels,” he said.

“The internet has become the dynamo of retail – it is where all the growth is now.”

Some four million people shopped online on Christmas Day 2007, spending an estimated total of £84m (€112.3m).

This was mainly due to a raft of retailers such as Marks & Spencer, Comet and Dixons launching their sales online that day.

Figures released earlier this month by the BRC showed total UK retail sales rose only 0.3% last month compared to December 2006. That was the worst December figure since 2004.

BRC spokesman Krishan Rama said: “The IMRG figures are always higher because they include a range of things which aren’t actually retail spending. This includes things like holidays.

“Obviously internet spending is growing rapidly but still only represents 6% of retail sales.

“With one or two exceptions the biggest online retailers are also the biggest traditional retailers. It is just another way for them to reach their customers.”

The IMRG Capgemini Index tracks online sales using data from 60 major e-retailers.

Its data includes retail spending such as groceries, clothes, electricals, tickets, travel and digital downloads.

The index excludes online spending on sectors such as telecoms, utilities, gambling, cars, property and financial services.