News
Online Shops Buck Downward Spiral Of High Street
Online retailers are defying the gloom on the high street by reporting booming business. Amid repeated signs that the economy and retail sales are both starting to slow, Internet sales continue to increase, according to Verdict Research Consulting.Consumers seeking the best prices are increasingly turning to online shopping, it is claimed. With Internet retail spending predicted to grow by 32% compared to offline sales, which will see minimal growth of 1.2%.
Online retailing is now worth £19.3 Billion a year and will account for 6.7% of retail ex-penditure in 2008. As a result, an online presence could make the difference between retail success and failure, says the report.
The Internet has grown by more than 5,000% over the past decade. Despite the current economic situation and a general slowdown in retail expenditure, the Internet looks set to continue its trend of superior growth. The growth in online sales for 2008 will be slightly above average online growth of the past five years – while “bricks and mortar” growth will be well below average.
Neil Saunders, Verdict’s director of consulting said: “Internet retailing seems to be laugh-ing in the face of the economic slowdown. While more muted consumer sentiment may have a slight downward impact on online growth rates, the Internet seems much better placed than physical locations to weather the storm.”
Verdict forecasts that by 2012 online retail will account for almost 14% of all retail expen-diture – in cash terms about £44.5billion. One of the factors to be behind the continual success of Internet retailing is its ability to deliver in terms of price – something that is be-coming increasingly important to consumers who find their disposable incomes squeezed by rising utility, tax and mortgage bills.
Consumers also found it useful for browsing – a factor increasing in importance as fuel prices soar.
- Daily Telegraph 16/04/08