Online retail spending up 38 percent

Online retail sales in Britain leapt 38 percent in the first half of the year to account for 17 pence in every pound spent, and this figure could rise to as high as 50 pence in five years, a report said on Friday.

The IMRG Capgemini e-Retail Sales Index showed consumers spent over 26.5 billion pounds online in the first six months of the year, equivalent to half of all supermarket sales and larger than all retail sales for clothing and footwear.

Technology consultancy Capgemini also forecast that between 30 percent and 50 percent of all retail sales will be online in the next five years, with many firms reaching a tipping point where they will have to question the viability of their stores.

"We estimate this point to be at around 20 percent online sales and can see this when we look at the categories at the forefront of the online revolution: books, music/DVDs and electricals," said Mike Petevinos, head of consulting for retail for Capgemini UK.

"As the industry as a whole reaches the 20 percent tipping point in 2008, more categories are sure to follow."

IMRG Capgemini reported pronounced increases in sales at both the top end and bottom end of the market, indicating that consumers are shopping more smartly - buying everyday items at discount retailers while adding a touch of luxury with select items from high-end retail outlets.

Clothing and footwear sales, which have been under pressure at store groups, were up particularly strongly, with clothing up 32 percent, lingerie up 37 percent and footwear up 38 percent.

While outperforming store group sales, however, the Internet is not immune to the credit crunch.

Total online sales fell 5 percent in June, the first year-on-year decline for that month since 2005.