Green retail set to soar as prices fall

UK online sales of environmentally-friendly products are expected to hit £1.4bn in value by 2015, up from £607m in 2009.

These are the key findings of new research carried out for shopping service Kelkoo by the Centre for Economics and Business Research. It forecasts that nationwide, total sales of green products will more than double in value from £8.04m in 2009 to £17.1bn by 2015.

The rise is forecast despite the fact that consumers today pay a premium of 44% for products with eco-friendly credentials. That ‘green premium,’ however, is expected to fall by 19% to 36% by 2012.

Already, green retail sales have risen by 451% since 2000, from £1.5bn to £8.04bn today. The average UK household spends £305 a year on such products, and that’s expected to go up to £648 a year by 2015.

The figures come against estimates that products and packaging make up 52% of the average greenhouse gas emissions generated by households. They are also implicated in the emissions generated by transport and domestic heating. Large UK businesses, says Kelkoo, are spending 0.16% of their revenues on climate change and promoting sustainability, with the largest amount of spending coming from the retail sector, at £619m a year.

Bruce Fair, managing director of Kelkoo UK, said: “Green only accounts for 2.3% of all retail spending in the UK today and it is set to represent 4.3% of the retail market by 2015.

“We can expect availability, green price premiums and consumer demand to change over the next few years. But probably the single most important factor preventing a greater take-up of green merchandise.” He added: “The fact that consumers can save 5% on average on green non-food items by doing their shopping online, also helps to compensate for green premiums.”

Where are we spending the green pound online?

Source: Kelkoo. Figures for 2009.

Food and drink £102m

Electrical goods £166m

Stationery £172m

Together these sectors account for 73% of online green spending.