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Last Updated: Friday, 25 May 2007, 08:08 GMT 09:08 UK
Online retailing 'surging ahead'
Person using a computer
Cheaper broadband is fuelling the growth in online shopping
Online retailing in the UK has grown at its fastest rate since the dotcom bubble burst, a survey has claimed.

The amount of money spent by consumers shopping online increased by 33.4% to 10.9bn last year, retail analysts Verdict Research said.

Verdict also sees online sales almost tripling over the next five years.

The research group said that faster and cheaper internet access was driving the growth at a time when many High Street retailers were seeing demand wane.

Graph: Online spending growth

Of 3,000 customers surveyed, two thirds had broadband internet connections and shopped online more often because of it, Verdict said.

The company's research covered online spending on goods, and did not include sales of flights, tickets and insurance.

Verdict predicts that in 2011, online retailing will be worth about 28.1bn, or about 8.9% of the UK's total retail sales.

However, Verdict warned that most of the growth in sales probably would come from existing online shoppers buying more items rather than more people shopping over the internet.

Staying offline

While many UK retailers have scaled up their online operations, including Ikea and Waterstones, Verdict identified three types of retailers that were proving reluctant to increase their online presence.

Verdict said that food retailers that were not already providing an online service were staying off because the cost of launching a web operation was too high.

Value retailers such as Primark and Matalan have tended not to launch online operations because their business models depend on driving sales in their stores, it added.

And small, specialist retailers have been avoiding online sales because their small scale made it difficult to pay for the necessary infrastructure.

Despite these pockets of resistance, the outlook remained bright with other industries moving quickly into cyberspace, the analysts said.

"Even with some retailers staying out of the market, online sales in the UK are set to triple in value," Verdict explained.

"By 2011, the typical spend of an online shopper will grow to 1,056 per year with the clothing and footwear, DIY and gardening, and food and grocery sectors achieving the fastest growth," it predicted.

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