High street chill as online sales soar by 222 per cent

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The Independent Online

Retailers have enjoyed booming online revenue over the last five years, which has piled the pressure on struggling high street chains.

Online sales, including the websites of retailers with physical stores, rocketed by 222 per cent – equal to an increase of £20bn – over the five years to December 2012, according to the British Retail Consortium.

Despite the boost from new stores, non-online sales in stores only grew by 12 per cent over the same period, representing incremental revenue of £28.9bn.

Nick Hood, a business risk analyst at Company Watch, the credit information specialist, said: "If ever confirmation was needed of the runaway growth of online shopping, these numbers demonstrate that consumer habits are changing in a fundamental way.

"Whether they are spending by mobile or via their tablets while on the move, or on the internet from the comfort of their homes, they are increasingly rejecting the concept of physical shopping except in the sense of using stores as showrooms."

The figures come at a time when one in seven shops in town centres in England and Wales is vacant, according to the Local Data Company.

Internet sales now account for 9.3 per cent of the £310.8bn spent in the retail sector last year, following a 13.7 per cent spike to £29bn in 2012, according to the BRC.

Purchases made in stores rose by a substantially weaker 1.7 per cent to £281.8bn last year.

The growth will fan the flames of the debate raging about the minuscule corporation tax paid by the UK's biggest web retailer, Amazon, and whether internet specialists should be subject to a special online tax, as they don't have stores subject to punitive business rates.

Alongside the inexorable rise in internet sales, chains have also had to battle a sharp jump in business rates, the property taxes linked to the rateable value of commercial premises and the retail prices index measure of inflation.

All businesses, including retailers, paid an additional £4.3bn in business rates – equal to a rise of 22.5 per cent – between 2007 and 2012, according to Government data.