High street under threat from online sales

British broadband users now spend more time shopping online than banking, gaming, or downloading music. In total 13.5 million consumers are shopping online spending an average of 4 days a year doing so. Based on these trends, a report by independent price comparison and switching service, uSwitch.com, predicts that internet spend could rise to £40 billion by the end of this yearand to a staggering £162 billion over the next decade – accounting for over 40% of all UK retail spend.

Online transactions reached an all-time high of £4.2 billion in July this year, (up from £2.34 billion in the same period last year) as consumers turned away from the high street in a bid to escape this summer’s miserable weather. While the benefits of shopping online are clear in terms of time and convenience, uSwitch.com reveals that consumers can also reap the benefits financially. Each household in the UK can save a staggering £500 a year (£42 per month) by purchasing goods and services online.

Britain is the largest online retail market in Europe with more than 27 million people expected to shop online over Christmas. In fact, this festive season it is predicted that consumers will break through the £500 barrier for the first time, with the average online shopper spending £509 - a 40% increase on last year. This means generous Brits will spend more than the average French or German online Christmas shopper combined.

Steve Weller, Head of Communications Services at uSwitch.com, comments: “Not only does shopping online save you time and money, but it can actually pay for itself. Each household can save £500 which pays for your annual broadband cost nearly three times over. “Over the last five years broadband prices have halved while speeds have gone up, making it cheaper and simpler for consumers to log on instead of going out to the shops. Online security has vastly improved so our peace of mind is greater than ever before. The internet makes it easy to shop around at maybe 40 or 50 different stores in one go to make sure that we are getting the best deals. No doubt, the fact that as nation we could save a massive £13 billion a year by shopping online is another reason why we as consumers have whole heartedly embraced online shopping.”

The study also reveals that the average household currently spends £980 a year on online goods and services, representing 10% of its £9,630 total annual shopping bill. The most popular products bought online by over half of adult internet users are holidays, music and films.

Shopping online for service goods, such as broadband, credit cards and energy proves the most fruitful, with prices on average 21% cheaper than through traditional retailers. Travel and leisure activities are also on average 15% cheaper if bought over the internet, while the smallest savings are made when buying grocery items online. On average savings of 13% can be made, but the survey revealed that, for everyday items such as bread and milk, consumers are no better off buying online than on the high street.