Online retailers winners in Christmas trading

Online retailers look set to be crowned among the victors of the Christmas trading war this year alongside an uneven showing on the high street.

Internet sales in Britain for the first time peaked during the start of seasonal discounting last week after surging more than 50 percent in the run up to Christmas, online retail tracker IMRG reported.

It was the opposite story for the high street with the number of Britons visiting stores down 6.8 percent in the week after Christmas, according to data from FootFall on Wednesday.

"This has definitely been an online Christmas," James Roper, chief executive of the Interactive Media in Retail Group (IMRG) said. "We think 25 million people now shop on the Internet."

Roper said early evidence showed online Christmas sales are looking to be around half a billion pounds better than already strong industry forecasts, and will top 7.5 billion pounds in the 10 weeks leading up to the holiday.

More surprisingly, Roper said data from IMRG and eDigital Research showed that unlike in previous years, there was no sign of a post-Christmas fall in online demand.

Instead, visits to the online stores of leading retailers on December 27 -- the start of the holiday discounting season -- spiked 30 percent higher than any previous peak.

"The young Internet shopping industry is already a huge success, with potential to continue to grow at 40 percent per annum for the foreseeable future," Roper said.


Early reports suggest retailers made an uneven showing during crucial Christmas trading while many consumers struggled with soaring household bills, higher borrowing costs and tame wage growth.

Premium grocers, luxury goods stores as well as the country's biggest retailer Tesco are expected to have performed strongly while middle market store owners have struggled.

However, there are indications a strong Internet strategy will have helped to separate winners from the losers.

Tesco, the world's fifth largest retailer, which forecast a "good Christmas," saw visitors to swell to 1.3 million over the holiday period. PC World and Curry's are expected to benefit from parent company DSG International's early push into online selling.

Analysts predict the Christmas fortunes of clothing retailer Next, which reports on Thursday, rest on the success of its home and online shopping Directory business.

"Part of the reason why high street retailers are having a tough time is due to the inexorable rise of home shopping via the Internet," Investec Securities analyst Mark Charnock wrote in a note last month.

Among those hardest hit are some middle market retailers and sellers of music and movies who are suffering from a boom in downloads from the likes of Apple's iTunes.

Woolworths and HMV issued profit warnings before Christmas while Music Zone, a privately-owned DVD and CD store, filed for administration on Wednesday.

Data from Internet tracker Hitwise showed visits to music download sites rose 50 percent from Christmas Day 2005.

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