Humbug for high streets as Christmas goes online

THE CHRISTMAS retail market will be driven by booming digital sales again this year, with the value of goods sold in physical stores falling in real terms, according to a new forecast.

Internet sales are expected to rise to £5bn, up 19 per cent on last year, according to a forecast from Deloitte.

But excluding online business, physical retailers are set to struggle: consumer spending is only predicted to rise by 1.59 per cent when internet transactions are discounted, a below-inflation increase from 2012.

Total sales this Christmas, both on and offline, are set to rise 3.5 per cent, pushing past £40bn.

Deloitte suggests that click-and-collect services are one way that high street retailers can benefit from the growing share of the online market, adding that there are already an estimated 20,000 such collection points around the country.

According to recent research by the firm, 47 per cent of people think empty shops on the high street would make convenient places to pick up goods ordered online.

The Office for National Statistics began recording online sales as a proportion of the retail market in early 2007, when less than three per cent of transactions took place on the internet. More than 10 per cent of business is now conducted online.

“Shoppers are expected to loosen purse strings off the back of rising consumer confidence and improving economic conditions,” said Ian Geddes, Deloitte’s head of retail in the UK.

However, he added: “Store collection is now seen as a basic offering and those retailers without this capability will struggle to convert online sales and lose resulting footfall in-store.”

Research released by Rackspace today adds that a third of UK adults they surveyed intend to spend less than last year, and 56 per cent say they plan to spend more than half their budget for Christmas shopping online, adding pressure to high streets.