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Christmas shopping: Online v High Street

• Rory Cellan-Jones
• 7 Dec 09, 10:02 GMT

It's supposed to be the biggest, busiest day of the year for online shopping - and as the amount we spend online grows each year, then today should bring a new record.

I'm spending the day in Play.com's giant warehouse off the M1 (they're rather sensitive about the exact location so I won't give it away) where they're madly packaging up DVDs, books, games consoles and other presents which will then be despatched across the UK.

In past years I've visited similar giant sheds run by Amazon and Argos, and have come away with the impression that online shopping has become the way most people now deal with Christmas. But that turns out to be wrong - what's surprising is not how much online shopping there is but how little.

The latest figures from the Office of National Statistics show that just 3.9% of retail sales now take place online. The Internet Market Research Group - which represents online retailers - puts the figure much higher, at between 10 and 15% but they include tickets, travel and digital music sales, which aren't counted towards the government figures.

Tthere's no doubt that online shopping is growing - though there was a bit of a hiccup last year - and is particularly popular at Christmas.

So last December its share of retail sales was 3.7% compared with just 2.8% in the summer. But it's still very much a minority sport. Take Play.com, which says it is the UK's second biggest online retailer. Its annual turnover is £450m, which makes it a respectable business - but when you look at Tesco's UK turnover for 2008 of £35bn they are still just a minnow.

A decade ago, as online retailing began to take off there were all sorts of outlandish predictions of how rapidly it would grow - if you believed some pundits, the high streets would be left deserted as we all retreated to our computers to do our shopping.

Some early experiments showed that it was not going to be that easy - remember Boo.com or America's Webvan? But others learned from those disasters and continued to grow, though even Amazon's profits look puny when compared with those churned out by Tesco.

What we've found is that while the internet is now the natural place for shoppers to look for books, DVDs, or gadgets, the high street remains the popular choice for a lot of other goods. Some households may choose to get their groceries online or look for designer clothes - but most food and fashion shopping still takes place in the real world.

Why people choose to brave the cold and the crowds to buy presents on the high street is something of a mystery - but maybe that annual ritual of endless queues, sharp elbows and Slade ringing in your ears, is still more attractive than just clicking your way through your Christmas shopping.

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