U.K. online shopping will grow at a “significantly” slower pace as the Internet becomes more common among the population and government spending cuts weigh on shoppers, according to Verdict Research.
Average annual growth will be 12 percent between 2009 and 2014, compared with 35 percent in the previous decade, the market researcher said. Online sales rose to 20 billion pounds ($31 billion) in 2009, or 7 percent of total retail spending.
More than half of the U.K. population already shop online, with 35-to-44 year-olds the biggest group, buying groceries, electrical products and clothing, Verdict said. Consumers who don’t yet have an Internet connection are less-affluent 15-to-24 year-olds and older shoppers, the researcher said. The opportunity for retailers lies in converting them, while encouraging existing shoppers to spend more, Verdict said.
“It’s going to be really difficult for retailers in the next five years,” Verdict analyst Maureen Hinton said at a London conference. “Retailers need to look at ways of retaining existing customers and win over competitors’ shoppers.”