E-trade lifts sluggish Xmas

Christmas online trade rose by about a third year on year despite poor high-street sales, according to the latest UK figures from analysts and retailers.

Twenty million items were ordered online, an increase of 30 percent, according to the Royal Mail and online retail body IMRG. The number of online shoppers increased from seven to 10 million, spending £1bn.

However, some retailers said a lack of confidence in online shopping is still holding back sales. Although electronics seller Empire Direct saw its sales double year on year, marketing manager Mike Frost said, "About 50 percent of our sales are over the phone [but] we estimate that in reality, 70 percent are Internet sales. Buyers of big-ticket items want to check we really have the goods in stock before they part with their money."

Trade magazine The Grocer also last week highlighted that none of the six major UK supermarket sites can reliably deliver common goods ordered online.

Despite these failings, Tesco was among many retailers reporting a boom in Internet sales. Its Web shopping service enjoyed a record-breaking Christmas with over 110,000 deliveries in the Christmas week, and more than £10m a week in sales in December.

"More than 2.5 million customers visited our site in December," said Tesco.com chief executive John Browett. "Online supermarket shopping is bound to boom even further in the coming year."

The John Lewis department store chain also saw growth. Simon Palethorpe, managing director of John Lewis Direct, said, "Demand in the run-up to Christmas was three times what we saw in 2001."

Paul Kitchen, head of the Consumers' Association's Which? Online site, said, "There is still a need to increase consumer confidence in online shopping." The organisation last week halted its Which? Web Trader site approval scheme, designed to underline the trustworthiness of sites, citing the high costs of administration. Kitchen said that businesses and government should work harder to improve trust in e-commerce.

For many retailers, sales grew faster online than in the high street.

Snowlines, which sells winter sports and fishing equipment, reported 50 percent growth online. Snowlines' Colin McPhail said trade in the high-street store had fallen compared with last year. "But online sales have more than made up the shortfall so we are on target to exceed last year's turnover," he added.

Total UK Christmas sales were static for the first time in 10 years, according to the CBI. More retailers said sales had fallen than risen, for the first time in nearly four years.

Katharina Grimme of analyst company Ovum said online performance was impressive in view of economic conditions. "Online sales have shown a very positive result, especially compared with the poor economic results in general and retailing overall," she said. IMRG predicts continued online growth this year, with more than 17 million UK consumers spending about £15bn.

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See also:

Interview: E-shoppers grow in confidence

John Lewis Direct's Simon Palethorpe explains how links with a trusted high-street brand have benefited the online retailer, and outlines his plans to offer a more personalised service  17 Feb 2003

Comment: Site improvements pay off

Research shows that online retailers that improved site responsiveness and reliability during 2002 had their efforts rewarded over Christmas, writes Madeline Bennett  20 Jan 2003

Which? Web Trader logo shuts up shop

Kitemark scheme has had its day  08 Jan 2003

Comment: Confidence takes a hammering

This should be a busy Christmas for many e-merchants, but next year might be a different story unless the growing problem of auction fraud is tackled, warns Madeline Bennett  13 Dec 2002

Interview: Security pays off for e-traders

Phil Battison of online payment specialist WorldPay explains how e-traders can win more custom and fight Internet fraud  02 Dec 2002

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