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Online sales continue to boom

Published:  23 July, 2008

Online retailing continues to boom with 15 pence of every pound now spent on the internet, new figures show.

The data is released in the IMRG Capgemini e-Retail Sales Index, which is based on sales at around 60 e-retailers including Tesco, Marks & Spencer, Waitrose and John Lewis.

It shows that online retail shopping increased by 54% last year to reach 46.6bn in 2007, out of a total retail market worth 300bn, with 15.2bn spent online in the 12-week run up to Christmas.

Announcing the figures, James Roper, ceo of IMRG, said: "Last year has been extraordinary. We saw much stronger growth than for the last five to six years. Where will it end?

"The traditional view was online would account for 15% of retail sales but it achieved that last year. No way is that tapering off. The best half of the population has not got broadband at home. Some retailers are still not selling online and there are product ranges that are not yet represented online."

Roper added: "It is clear there is huge future potential for further growth in this area. In five years time half of retail will be attributable to online."

Retailers who performed well online included Tesco, Marks & Spencer and John Lewis.

It is estimated online expenditure for food and drink was worth 2.4bn last year with accounting for half of that business.

The survey also shows Christmas Day emerged as a new sales opportunity for online business, encouraged by effective marketing from some e-retailers.

According to the Index, online transactions on 25 December rose 168% compared with Christmas Day 2006 with music downloads being one of the most popular purchases.

"For the first time it was major day," said Roper. "Next year it will be even better because retailers will realise they missed a trick."

It is estimated that half of all retail purchases will take place online in five years.