Internet sales by UK home shoppers surge two-thirds to £18bn

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The value of households' purchases over the internet surged by more than two-thirds last year, according to figures highlighting the growth in e-commerce.

Shoppers sitting at home bought £18.1bn of goods and services on the Web last year, up 67 per cent on the previous year, the Office for National Statistics said.

Most up-to-date figures show internet retailers have been posting stronger sales increases in recent months. IMRG, the industry body for online retail, said the annual growth rate had jumped from 18 per cent in the first quarter of the year to 38 per cent in September. It estimates 24 million people spent £1.6bn online in September - £67 each.

IMRG's forecast for the calendar year is a 35 per cent rise, the first genuine percentage rise since its started tracking data in 2000.

Its first survey showed growth of 170 per cent albeit on tiny volumes, which declined every year until 2004 . It said its figures differed from the ONS's by excluding financial transactions and sales on sites such as eBay.

James Roper, IMRG's chief executive, said electrical goods made up the largest single segment, with one-quarter of the value, followed by clothing with one-fifth.

He said the forecast annual rise for 2005 showed the market was showing "traction" after years of slowing growth rates. "After the bomb in 2000 there was no investment in the sector and the entrepreneurs went away and there were just a lot of assets being sweated," Mr Roper said. "Many online retailers have begun to invest seriously this year for the first time since 2000."

IMRG said it expected consumers and online retailers to become more "savvy" that there will be a sharp rise in sales up to Christmas, despite gloom from the high street over the festive season. It expects £5bn will be spent online relating to Christmas, out of an annual total of £19.6bn. Alcohol sales were up 50 per cent in September, it said.

A recent retail report from GVA Grimley, the property advisers reported strong online sales of electrical goods, beer, wine and spirits and gifts.

IMRG says retail will make up one-fifth of total retail by 2010. Although the first online retailer was Amazon of the US, with no stores, recent UK growth has been through the major supermarkets. Few households will not have seen a van in the livery of Tesco, Sainsbury's or Ocado, Waitrose's logistics unit.