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Monday, 16 October, 2000, 11:57 GMT 12:57 UK
Traditional retailers beat dot.coms
Goldfish swimming with prices BBC
Goldfish is the bearer of bad news for dot.coms
By BBC News Online internet reporter Mark Ward

As more dot.coms go bust, a survey of web prices has bleak news for the ones that are managing to survive.

Traditional retailers are consistently offering lower online prices than the dot.coms can manage, reveals a survey by credit card company Goldfish.

The results suggest that bricks and mortar retailers may have the edge over pure web businesses who have no way of offsetting the losses they make online.

The survey also hints that competition on the net is getting more intense as many of the prices it tracks are continuing to drop.

Inflation index

Goldfish, which is owned by UK services group Centrica, operates a credit card and a website that compares online prices of many popular goods and services such as DVD players, washing machines and online travel deals.

Now it has extended the range of things it keeps an eye on by establishing an e-tail price index which scrutinises online shops or e-tailers.

Like the more well-known Retail Price Index this is an average measure of price changes among a basket of commonly bought goods and services.

The RPI includes such things as the price of biscuits, imported lamb as well as rent and fuel prices. The RPI is a measure of the rate of inflation.

Many of the goods and services included in the RPI are not yet available online, so the e-tail index is not quite as broad as its real world counterpart. The ePI tracks 1,300 products across 150 e-tailers.

Price promise

The first results from the e-tail index reveal some bad news for companies who have a web presence and nothing more.

"For similar products traditional retailers who have added online distribution, as opposed to those who are pure play dot.coms, were 12.7% cheaper - which is not something we were expecting," said a Goldfish spokesman,

Many dot.coms are slashing prices in a bid to attract customers but the Goldfish survey suggests that traditional retailers are still able to undercut them he said.

The range of prices for similar goods on the net can be huge, said the spokesman. Between some companies there can be 40% difference in price.

The pressure on dot.coms was only going to increase as online prices continue to fall. Between July and September this year prices on the web were down 2.4%. The biggest drop was seen in the cost of online holidays which fell nearly 10%.

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