Online sales surge to record at Christmas

Online shopping in Britain grew at its fastest rate ever as consumers spent almost £5 billion on the internet in the 10 weeks before Christmas, a survey showed yesterday.

Some 24 million people shopped for Christmas presents online, spending an average of £209, said the Interactive Media in Retail Group (IMRG), an industry body for electronic retailers.

The surge in its e-retailing index, an almost 50 per cent increase on Christmas 2004, comes amid rapid growth in broadband connections, with more than 37 per cent of the country's households now having a high-speed internet line.

Jo Tucker, IMRG's managing director, said consumers wanted convenience and choice.

"Consumers have spoken," said Mr Tucker. "Many just don't have the time to trudge the streets hoping goods will be in stock.

"There can be no longer any doubt that the internet is a major part of the retail landscape, and that it will dominate the retail agenda for the next several years."

Internet shopping now accounts for about nine per cent of retail spending, and IMRG predicts strong growth to continue.

It expects the e-retailing market to grow 36 per cent in the current year to £26 billion. The group predicts that average individual spending will exceed £1,000 for the first time in 2006.

But strong growth in online sales has put pressure on some traditional outlets.

Music and books retailer HMV became a high-profile example last week when its shares dropped after it posted a drop in Christmas sales.

The company blamed the combined power of online retailers and supermarkets for its flagging fortunes.

By contrast, play.com, an online entertainment and electronic goods retailer, reported a 37 per cent increase in music sales in the fourth quarter.

Boots.com, the online division of health and beauty retailer Boots reported a 40 per cent rise in third quarter sales.

Sales online are now bigger than at the largest Boots stores, with the core health and beauty products the main driver of customer visits.

Buoyant online sales growth also contrasts with a mere four per cent year-on-year increase in retail sales in December, official data released yesterday showed.

Electronic goods, such as Apple's iPod music player, Sony's PSP and Microsoft's XBox 360 games machines dominated Christmas sales on the internet, retailers said.