On Internet Business

EU and retail sales – online up, store-based down, problems ahead

Posted by Michael under Business Growth, Online Retail

It’s predicted that online retail business in Europe could increase by 20% in 2010 – massively exceeding store-based trade. Key market increases are expected in France, Poland and Spain as they develop the online retail habit that has already bitten the UK, Germany and Italy. Research conducted by the Centre for Retail Research for price-comparison website Kelkoo predicts that the euro-based online shopping market could reach 172 billion euros in 2010 – which would outstrip the forecast for USA online retail growth of just 10%. By contrast, the predicted growth for shop-based European retailing is just 1.4 %.

The UK will see the lowest rate of growth, just 12.4%, although overall it is the largest European market, being worth around 50 billion euros. It’s a staggering rate of growth in comparison to retail – for example, German retail sales dropped by nearly 2% last year.

And while online retail booms, the euro economy as a whole is worrying everybody – the PIGS: Portugal, Ireland, Greece and Spain all have national credit rating under extreme pressure in the euro-zone – and while the Irish government has pushed through difficult budgets to ensure economy stability returns, Greece in particular seems unable to commit to the same degree of rigour. As the governments in Athens, Lisbon and Madrid face pressure from other euro-zone nations that really don’t want to be bailing out their neighbours, tiny Latvia which chose to peg its own currency to the euro-standard is worst off of all – it’s lost a quarter of its economy since the worldwide recession started, and retail sales have dropped by nearly a third.

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