E-tail sales soar as the high street resorts to discounting

Online retail sales reached a new all-time high in May, with UK shoppers spending more than £1.5bn online during the month.

Shoppers spent £408m (35.6 per cent) more in May 2005 than they did a year earlier, and £180m (13 per cent) more than they did in April.

The growth in online shopping outstripped growth on the high street by a factor of 40 in May, despite widespread aggressive discounting by nervous bricks-and-mortar retailers, according to the Interactive Media in Retail Group (IMRG), the industry body set up to monitor and promote online retail.

IMRG managing director Jo Tucker says: “In a tough retail environment, large numbers of consumers are opting for the convenience and value that they are now confident they will find online. And the internet is a great trading medium for retailers, too: it gives them real-time feedback on consumers’ buying moods, enabling them to optimise their offers, ranges, prices and stock levels with precision.”

In stark contrast, total retail sales growth was at its slowest rate since 1947, according to the latest government statistics, with a year-on-year increase of just 0.9 per cent.

The IMRG says a number of factors are contributing to online shopping’s growth, including the rapid consumer take-up of broadband; secure payment mechanisms; improved delivery; and websites that are easier to use and more consumer-friendly. But there are still many sectors where there are no strong online merchants, including high-end fashion, real estate and furniture.

Internet Advertising Bureau chief executive Guy Phillipson says: “There’s a lesson here for retailers – they have to have an online presence, they have to be easy to find and they have to be easy to trade with. Just as important, their online operations must reflect their offline brand in all ways.”

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