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A general view of Amazon's Fulfilment Centre in Peterborough
Amazon's grotto: the company's Fulfilment Centre in Peterborough. Photograph: Andrew Yates/AFP/Getty Images
Amazon's grotto: the company's Fulfilment Centre in Peterborough. Photograph: Andrew Yates/AFP/Getty Images

Online and upward: UK internet shopping hits record high

This article is more than 10 years old
As shoppers shun the high street and out-of-town sites, internet sales rise to monthly peak of over £10bn for November

Shoppers may be avoiding the high street but the rise in online shopping continues unabated, with spending in November up 10% on a year ago.

As the latest footfall numbers showed a 2.9% drop in visits to high streets, out-of-town sites and shopping centres last month, online sales in the UK rose to a monthly record of £10.1bn.

Electronic gadgets are leading the boom, according to the IMRG Capgemini e-Retail Sales Index, as shoppers snapped up iPads and games consoles online. Sales of electrical goods rose 63% in November, while sales of home and garden items rose 42%, according to the study.

That strong growth is in dramatic contrast to the picture on the high street.

The number of shoppers across the UK was down 2.9% on November last year, according to figures released at the weekend by the British Retail Consortium and analysts at Springboard. In central London there was a fall of 4.1% in the week to 15 December compared with a year ago, according to the New West End Company, which represents 600 retailers.

Chris Webster, head of retail consulting and technology at the consultancy firm Capgemini, said: "E-retail continues to be the growth engine of an otherwise struggling retail sector."

The rapid rise in online sales has led to some problems for retailers. Waitrose admitted it had been unable to deliver 200 orders on Sunday and another 200 on Monday because of an IT glitch. It said shoppers had been compensated and that the service was back to normal.

Some Argos shoppers were disappointed when they ordered goods online, to be picked up at the retailer's six new digital outlets, only to find the stores closed. Four of the stores, all in London, finally opened at the weekend but outlets in Dunfermline and Colchester remained shut.

The strong growth in sales online is partly responsible for the drop in visitor numbers to the high street as an increasing array of goods can be bought from the comfort of the sofa. But 90% of shopping in the UK is still carried out in physical stores.

The difference in performance between online and high-street shops is partly being exaggerated by Christmas Day this year falling on a Wednesday, meaning shoppers are happier to leave the bulk of their spending at bricks-and-mortar stores until this weekend or even later.

Shoppers are expected to spend £12bn this weekend, compared with £17bn during the whole of October, according to analysts at Verdict Research. That would be 20% more compared with a year ago.

High street footfall is also being affected by shoppers holding out for discounts. Sally Eden, at the New West End Company, said: "Shoppers are accustomed to pre-Christmas bargains and are holding out to ensure they get the best deals, and have put off their main shopping for the final nine days before Christmas."

Fashion retailers have been among the first to buckle, with discounts of up to 50% already on view. The milder-than-usual weather, as well as competing demand for shoppers' available cash from expensive gadgets such as tablet computers, has left many stores with too much stock.

Several analysts predict that the slow build-up to Christmas will mean many retailers will now struggle to meet their sales targets.

Howard Archer, chief UK & European economist at IHS Global Insight said: "There is considerable uncertainty over just how good a Christmas this will be for retailers despite the economy's improved performance overall – especially as it is apparent that consumers took a breather in November and October after spending at a rapid rate through the third quarter."

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