Going green is 44 per cent more expensive

Despite increasing awareness of environmental issues, the green retail market remains relatively small, at an estimated 8bn last year or 2.3 per cent of total UK retail sales in 2009, the study by the Centre for Retail Research for price comparison website Kelkoo.co.uk found.

But sales of green products, defined as environmentally friendly, sustainable, easily recyclable and avoiding excessive energy in production and distribution, are set to increase 112 per cent from 8bn in 2009 to 17 bn by 2015, the report says.

Since 2000 sales of green products have soared 451 per cent from 1.5bn to 8.04bn now.

Green premiums remain highest on health and beauty (220 per cent), household products (76 per cent) and electricals (45 per cent) when compared to the price of standard goods. UK households currently spend an average of 305 a year on green products, with Switzerland spending the most at 481 and Spain the least at 273.

Products and packaging make up 52 per cent of the average greenhouse gas emissions generated by households, the highest output behind transport (26 per cent) and domestic heating (15 per cent), according to European Union statistics.

The report said the price of green products remained the main barrier to mass consumer uptake but by 2012 the premium for such products is expected to shrink to 36 per cent.

Kelkoo managing director Bruce Fair said: "Green only accounts for 2.3 per cent of all retail spending in the UK today and is set to represent 4.3 per cent of the retail market by 2015.

"We can expect availability, green price premiums and consumer demand to change over the next few years, but probably the single most important factor preventing a greater take-up of green merchandise in stores and the internet is price. Sales of green products will not become commonplace until suppliers give consumers better price incentives in-store and online to follow their consciences."

Changing buying patterns in the recession saw more interest in energy-saving appliances and lighting, as these products tended to save money in the long-term, he said. Green products might follow that trend.