03 June 2008, 18:15 PM
  • Food and grocery will make up almost a third of all money spent online in the UK by 2012, according to a new study by Verdict Research.

At present, electricals are taking the lion’s share with 25.1% of online retail spending. But, with the fastest rate of growth, the food and grocery sector is set to take first spot by 2012 with 29% of the total UK internet spend.

The study also shows that online spending rose by 35% in 2007 - a rate of growth almost ten times higher than that experienced by the total UK retail market. With internet access growing and users purchasing more frequently and more heavily online, this trend should continue.

Jeremy Rance, national director of the retail and wholesale sectors at Barclays Commercial Bank, says, “Over the last few months retailers have been telling us they are feeling the slowdown in the housing market feed through to footfall and spend per head on the high street. However, online sales have remained buoyant, partly driven by youth spending, but also by the convenience and value offered by the channel.”

However, despite some degree of cannibalisation, Verdict explains that physical shopping is far from doomed. There is still a need and place for physical locations. While having an internet presence is vital, giving the consumer choice by establishing strong links between the in-store and online offer is now essential.

“In many cases online and in-store sales channels will simply blur into one, becoming fully integrated,” says Malcolm Pinkerton, senior retail analyst at Verdict. “There is still a need for physical locations, but the number of stores required will vary according to sector - with the rise in music downloads there will not be such a need for music and video stores, for example.”