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UK shoppers spent 25% more online in December

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UK online spending grew by a quarter over Christmas, according to figures out today.

UK shoppers spent £6.8bn online in December, 25% more than at the same time last year and 7% more than in November, according to the IMRG Capgemini e-Retail Sales Index.

The figures for the final month of the year took total online spending in 2010 to £58.8bn, 18% ahead of 2009, and beyond the 13% growth originally predicted for 2010.

IMRG and Capgemini now predict a further 18% growth in 2011, taking total eretail sales for the year to £69bn.

James Roper, chief executive of IMRG, the trade body for online retail, said: “December saw an incredible jump in online sales as a result of the weather conditions and it’s reassuring to see that despite the coverage of delivery problems, consumer confidence was not affected. Growing confidence and reliance on eretail during times of adversity, whether that’s harsh weather conditions or belt-tightening as a result of the economy, has been reflected in the impressive growth throughout 2010.”

Chris Webster, head of retail consulting and technology at Capgemini, said: “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 economy recovery remains fragile.”

At the same time, figures also out today from the Office for National Statistics showed that online retail grew to 10.6% of total UK retail transactions in December, with an average of £770m spent online each week.

However, overall retail figures fell by 3.4% in the month, the ONS said, with food store sales faring badly. Kate Davies, ONS statistician, said: “One factor to blame was that December 2010 was the coldest December in 100 years. Another factor was a 5% rise in the prices of goods sold at food stores.” The Consumer Prices Index, published this week, rose by 3.7%, in contrast.

According to the IMRG/Capgemini report, areas of growth online included clothing and alcohol sales.

Online, individual retailers reported strong growth, with House of Fraser pointing to growth of 120%, John Lewis to 42% growth while Marks & Spencer’s sales were up by 25%.

Jonathon Brown, head of online selling at John Lewis, said: “We’ve had an outstanding Christmas and Clearance period in 2010, and there’s no doubt was a vital part of that success. Online sales for the five weeks to January 1 2011 were 42% up on last year, and it was particularly pleasing to have achieved several trading records. We have also now passed the £500m mark for online sales for the year. 

“The hard work our team put in over the year to develop the website really paid off, especially when snow affected trade at many of our branches. The increase in online sales, especially during the adverse weather in early December, demonstrated just how important the website has become to our customers.”

*Unveiling the December figures, IMRG also announced that it has teamed up with insurance broker Lockton to offer etailers insurance cover against threats including PCI fines, revenue lost as a result of system downtime and the costs of notifying those concerned in the event of a security breach. The cost of the insurance cover is included in IMRG’s new associate level of membership, which costs from £365 a year.

IMRG chief executive James Roper said: “Introducing insurance into the industry to help support e-retailers is something we have been looking to do for a while, and the Wikileaks cyber attacks emphasised the importance of this development.” For more details click here.

Our view: These figures go far to support the emerging impression that online did well this Christmas – but at the expense of offline sales. The high street, suggest the ONS figures, saw a fall in sales, with online taking up the slack. The lesson seems to be that shoppers still want to buy – but they want the convenience of doing it online when they need to, such as when it’s snowy. Offering that extra channel is fast becoming a must-have rather than a like-to-have.

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