Online retailers are set to ride to the rescue of Britain’s retail sector by posting the only growth in British retailing before 2012, according to the forecasts in a new report conducted for PayPal.
The PayPal UK Online Retail Report, undertaken by Experian, forecasts that by the end of 2011, high street sales will plummet by up to £8.3 billion while online retail sales in the UK are set to grow by up to 137% per cent. This expected growth, amounting to as much as £12.3 billion, would see the value of annual online retail sales jump from just under £9 billion to £21.3 billion.
The report is part of a major study for PayPal into the future of online retail and its role during and after the current recession. It suggests that the massive online growth is driven by a new breed of ‘considered consumers’ who are heading online to find better value.
The report forecasts that, from 2008 to 2011:
- Retail sales figures will grow by just 0.2%
- High street sales figures will decrease by up to 1.4%
- Overall non-store (catalogue and online) sales will increase by 49%
The figures would see the online retail market more than double its market share from 3.2% in 2008 to a possible 7.4% of total retail spending by the end of 2011.
“The value of online retail can no longer be dismissed as a sideshow. Its phenomenal growth is not only forecast to deliver sales of as much as £21.3 billion by 2011, but a £12.3 billion increase will also ensure that the entire UK retail sector is growing again by the end of 2011,” says Carl Scheible, managing director at PayPal UK.
“The recession has been tough for many UK retailers as they deal with the slowdown and its knock-on impact on consumer spending,” he adds. “Of course, many of the major high street brands have actually enjoyed the online boom, despite facing challenges in their own stores. The improvements in online shopping will continue to drive consumers until they are spending one in every 14 pounds online.”