Jan 24, 2011
Reading time
2 minutes
Download the article
Click here to print
Text size
aA+ aA-

Online retail sales seen up 18 percent in 2011

Jan 24, 2011

LONDON | Fri Jan 21, 2011 - Internet shopping will continue to grow strongly in Britain this year despite concerns over the macro economic outlook, an industry body forecast on Friday, as it reported a cold weather-related boost to sales in December.

Capgemini and consultants IMRG said on Friday online retail sales rose 25 percent year-on-year in December to 6.8 billion pounds, taking the total for 2010 to 58.8 billion pounds, up 18 percent and far outstripping an original forecast of 13 percent.

Growth in 2011 would also be 18 percent, they predicted, with total online sales estimated at 69 billion pounds.

"The December figures showed that despite the dire predictions during the run-up to the festive season, online retailers had a very successful Christmas, resulting in an above average year-on-year growth in nearly all sectors," said Capgemini/IMRG.

"This impressive growth can be attributed to two major factors, the impending increase in VAT and of course the coldest recorded December in the UK for 100 years."

The study highlighted a 40 percent year-on-year rise in December online sales of clothing, footwear and accessories and a 36 percent increase in alcohol sales.

"The ongoing trend of consumers putting down the car keys and turning on their computers is only set to continue particularly as consumers use the power of the web to make their money go further as the economic recovery remains fragile," said Chris Webster, head of retail consulting and technology at Capgemini.

Many UK store groups fear the 81 billion pounds of spending cuts announced by the government, as well as tax rises, a slowing housing market and hikes in transport and fuel costs will hit consumer demand in the months ahead.

A separate study from market researcher Kantar Worldpanel said the value of gifts purchased online increased from 14 percent to 19 percent between Christmas 2008 and Christmas 2009 but was frozen in the latest festive period.

It said December's heavy snow led to fears gifts would not be delivered in time for Christmas.

(Reporting by James Davey; David Cowell)

© Thomson Reuters 2023 All rights reserved.