Internet shopping reaches 10% of retail sales

Internet shopping reaches 10% of retail sales: "Figures show the growing power of the internet in the retail sector."

===

Internet shopping reaches 10% of retail sales
Ashley Seager
Friday January 20, 2006
The Guardian

The value of goods sold over the internet rose by 50% this Christmas compared with last year, figures out today show, in a sign of the growing power of the internet in the retail sector.

The figures, from trade body the Interactive Media in Retail Group (IMRG), confirm a prediction the group made before Christmas and show goods worth £19.2bn were sold through the internet in Britain last year, an increase of 34% over the previous year and up from just £800m in 2000. Of the £19.2bn, leisure travel booked over the internet totalled £2.5bn.

"We are forecasting that internet sales will rise by another 36% this year to around £26bn," said IMRG spokesman James Roper, adding that web sales now accounted for about 10% of all retail sales.

Sales over the internet in the 10 weeks to Christmas day were around £5bn, according to the IMRG, half as much again as the £3.33bn recorded in the same period of 2004.

The group said, though, that its figures did not yet include music downloads or anything sold on ebay. But they did count things such as air tickets bought from easyjet or Ryanair.

The explosive nature of the recent growth in internet sales, covering everything from supermarket groceries to ticket bookings, has made it hard for statisticians to measure. The IMRG is working with the Office for National Statistics, the Bank of England, Mastercard, Visa and ebay to come up with common definitions.

The ONS said yesterday it was confident it was picking up the vast bulk of internet sales because most were by traditional retailers over their websites. Its figures also include sales through the big web retailers such as Amazon.

It acknowledged, however, that it was struggling to pick up purchases of goods from businesses in other countries, services such as adult entertainment or online gambling - although these were probably showing up as outflows of money in the quarterly balance of payments figures.

As for ebay, it said it treated it as an auction site rather than a retailer. The fees and commissions charged by the website would show up in quarterly GDP data as household spending, while sales by retailers on the site should be captured by its monthly retail sales survey.

But it has not had overall web sales data since 2004, when it recorded £18.1bn, a rise of 67% from the year before and equivalent to a surprisingly low 2.5% of all household spending, of which retail sales make up about a third. It said that as of July last year, 55% of all UK households had access to the internet, up from 32% five years earlier.

It also said it was expanding the scope of its price collection so that it could feed the prices of goods sold on the internet into its cost of living calculations - a move some economists think could reduce the inflation figures.