August 23, 2007, 12:00 AM

U.K. online sales spike 80% in July over the same month a year ago

July online sales in the U.K. spiked 80% over July 2006, reaching a record £4.2 billion from £2.3 billion a year ago, the trade association Interactive Media in Retail Group reports. Growth in online sales in the prior 12 months was 36%.

July online sales in the U.K. spiked 80% over July 2006, reaching a record £4.2 billion from £2.3 billion a year ago, the trade association Interactive Media in Retail Group reports. The group reports that national statistics from the British government show that offline sales were up 3.3% in July.

Growth in online sales in the prior 12 months was 36%. "IMRG was surprised by the strength of July`s growth, so we checked and rechecked the figures, then checked them again," says Jo Evans, IMRG`s managing director who directs the research. "This data is sound. It reveals the extent to which the retail sector is being transformed by frictionless e-commerce.”

The IMRG says growth was fueled by the spread of broadband into the home in the U.K., wet weather which kept shoppers indoors and resulted in sales to replace water-damaged goods, and retailers’ release of new catalogs that drive shoppers online. In addition, the group says many of its retailer members report that as consumers shop online they become more comfortable buying online and increase their spending.

Consumer electronics retailers experienced the highest sales growth online, with such sales up 102% over a year earlier. Clothing, footwear & accessories sales were up 56% over a year earlier.

The July jump built on a trend of accelerating online sales this year, the trade association reports. Sales in January were 16.5% over a year earlier; February, 34.7%; March, 40.9%; April, 54.4%; May, 48%; and June, 55.1%.

"During the early years of this decade the e-retail industry was starved of investment-a backlash from the dot.com bust of 2000,” says James Roper, IMRG`s chief executive. “Although we saw that consumer demand was outstripping Internet retail supply, when annual growth fell to just 9.4% in December 2004 and 13.4% the following February, many people assumed that the sector had peaked. Then new investment began to arrive: at first just a trickle of new money and a handful of IPOs appeared, but now, two years later, there is a flood of serious capital being applied to building e-retail infrastructure.

“July`s extraordinarily strong market growth spotlights the high level of consumer demand, and yet we are really only just beginning to see basic facilities arriving, and still have nowhere near enough capacity to meet shoppers` appetite for e-retail, especially in areas such as parcel delivery, where huge improvements need to be made. With nearly half of homes yet to acquire broadband, and massive potential for improvement available in every aspect of it, strong e-retail growth is set to continue for many years to come. Web 2.0 is propagating Retail 2.0."

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