Internet shopping will grow strongly, says forecast

INTERNET shopping will continue to grow strongly in Britain this year despite concerns over the macro economic outlook, an industry body forecast as it reported a cold weather-related boost to sales in December.

Capgemini and consultants IMRG said on Friday online retail sales rose 25 percent year-on-year in December to 6.8bn, taking the total for 2010 to 58.8bn, up 18 per cent and far outstripping an original forecast of 13 per cent.

Growth in 2011 would also be 18 pe rcent, they predicted, with total online sales estimated at 69bn.

"The December figures showed that despite the dire predictions during the run-up to the festive season, online retailers had a very successful Christmas, resulting in an above average year-on-year growth in nearly all sectors," said Capgemini/IMRG.

"This impressive growth can be attributed to two major factors, the impending increase in VAT (sales tax) and of course the coldest recorded December in the UK for 100 years."

The study highlighted a 40 per cent year-on-year rise in December online sales of clothing, footwear and accessories and a 36 percent increase in alcohol sales.

"The ongoing trend of consumers putting down the car keys and turning on their computers is only set to continue particularly as consumers use the power of the web to make their money go further as the economic recovery remains fragile," said Chris Webster, head of retail consulting and technology at Capgemini.

Many store groups fear the 81bn of spending cuts announced by the Government, as well as tax rises, a slowing housing market and hikes in transport and fuel costs will hit consumer demand in the months ahead.