Online shopping spend in decline

Nov 27, 2008

Online shops are suffering the same fate as the high street with fewer customers spending money.

US net measurement firm comScore found that online shopping was in decline for the first time since it began measuring it in 2001.

Online shoppers in the US spent $8.2bn (£5.3bn) in November, down 4% on last year's figures.

ComScore forecast flat growth for the upcoming Christmas shopping season and did not rule out further decline.

"With consumer confidence low and disposable income tight, the first weeks of November have been very disappointing," said comScore chairman Gian Fulgoni.

As with offline shopping, people could be holding out for the sales, he added.

Last year online spending grew 19% over the holiday season, and 9% over the first 10 months of 2008.

"Assuming the stock market doesn't deteriorate materially during the season and that there is no apocalyptic news of major financial institutions, manufacturers or retailers failing, we should see online spending growth inch back towards positive as we get deeper into the season," said Mr Fulgoni.

"However, if there is any more significant bad news just over the horizon, all bets are off."

Not everyone agrees with the gloomy forecast.

Shopping comparison site Kelkoo has seen more traffic to its site as people turn away from the high street.

"We dispute the notion that online shopping in a downturn, in the UK and Europe at least, as there is much evidence that shows its is replacing the high street as a primary shopping location," said Bruce Fair, managing director of Kelkoo.

Source: BBC