Newsletter 40  July 2008/3

While retail spending in general continues to slide, the online sector is showing notable resilience. July’s IMRG Capgemini e-Retail Sales Index show that UK shoppers spent over £26.5 billion online in the first six months of 2008 – up 38 per cent on the £19.2 billion recorded for the first half of 2007.

The two organisations are predicting that online sales will remain strong for the rest of this year, driven by rising fuel costs and falling disposable income, a desire to achieve sustainability in the supply chain, and smarter consumer shopping habits.

The two organisations are not claiming that online retail is immune to the credit crunch. They point out that a dip in growth for June (down 5 per cent) is significantly more pronounced than one in the same period of 2007. Online sales of electrical and similar higher-value goods are understood have seen a more marked slowdown.

There has also been a trend away from visits to mid-market online retailers since June last year; they are down 6 per cent, while visits to low-end and high-end sites have risen.

Despite the inevitable wavering in sales, IMRG is still confidently predicting that the proportion of online shopping relative to all shopping will continue to grow, and could reach between 30 per cent and 50 per cent of all retail in the next five years.