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Monday 31 October 2011

Internet sales hit record high

Internet sales hit a record high last month as more UK shoppers bought their Christmas presents online rather than in the shops.

But with the bad weather hampering deliveries in some parts of the country, there are also fears that many of these gifts may not arrive in time.

Internet shopping accounted for 10.5% of all retail sales in November, the highest market share on record and up from 7.9% a year ago. This is based on overall takings, so may also indicate that more high-value goods are being ordered online.

The Office for National Statistics also suggested there was "anecdotal evidence" that customers were browsing in stores and then placing orders online from home, if the product could be bought cheaper over the web. This would be a blow to high street retailers without an e-commerce arm.

The ONS estimated that around £660m was spent on internet retail sales each week during November, out of a total weekly retail bill, excluding fuel, of £6.3bn.

There are thought to be around 4m parcels sitting in the warehouses of private courier firms around the country. Snow and ice has disrupted deliveries for several weeks, and the weather is expected to worsen over the next few days.

Scotland and the north-east have been worst hit, but other parts of the country are forecast to suffer disruption in the run-up to Christmas.

"We are being told by certain of our carrier partners that things are so severe in Scotland that they're running out of vehicles and trailers in the rest of the UK, impacting on deliveries in England and Wales," Simon Veale, director of Global Freight Solutions, told the Daily Mail.

Overall retail sales in November rose by 0.3% compared with October and were 1.1% higher than a year ago, beating analyst forecasts. Predominantly non-food stores saw a 3.6% increase in sales year-on-year, while sales at predominantly food stores decreased by 1.3% – the fifth consecutive fall. Household goods stores, though, bucked the general trend with a 5.7% drop in sales – possibly because fewer people are moving house and buying new furniture. Paint sales also fell sharply.

"The overall impression is that retail sales were reasonable but unspectacular ahead of the key Christmas shopping period," said Howard Archer, chief European and UK economist at IHS Global Insight.

"This boosts retailers' hopes that consumers are determined to have a good Christmas despite significant economic worries and uncertainties, and despite weather obstacles," Archer added.

The snow has also prevented people reaching the shops, with many retailers warning that their sales have suffered in recent weeks.

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