How Britain fell in love with online shopping

Yahoo

29-01-2025

Take a stroll down your local high street and what do you see? Coffee shops and restaurants, probably. Some combination of vape shops, nail bars and barbers perhaps. A smattering of shuttered premises, quite likely. But when it comes to stores selling actual things – clothes, books, hardware, electronics and so on – the numbers have been dwindling for years.
New figures suggesting the British spend a higher proportion of their income online than anyone else in the world may come as no surprise, then. We are splashing 8.8 per cent of our annual earnings online, analysis by fashion retailer Public Desire has found. This compares to the 4.3 per cent spent in the US and France.
The much-trailed death of our high streets has not been caused, after all, by a rejection of consumer capitalism in favour of some non-materialistic ideal. Rather, we have become a country that's now extremely good at internet shopping.
No longer a nation of shopkeepers, but certainly a nation of clickers, more familiar with the 'add to basket' and 'buy now' buttons than with our local greengrocer, who probably no longer exists.
But the web is, famously, worldwide. So what makes Britain top of the leaderboard where online shopping is concerned? The answer lies in a variety of factors, starting with our status as early adopters of the habit, and of the technology that enables it, and stretching through to the pandemic, when so many started working from home, where they were able to receive deliveries – which, in the case of non-essential items, could often only be bought online in any case.
Back in the days when most people still thought Amazon was only a South American river, personal computer use in Britain was relatively widespread.
Between 1988 and 1994, Britain had a higher PC ownership rate than even the US, according to a report from the London School of Economics.
In 1988, 17.2 per cent of British households owned a computer, compared to just 10.2 per cent of US households. By 1995 – the year that Amazon launched as an online bookseller – PC ownership rates in both countries had reached about 25 per cent.
In 2010, Ofcom found that UK consumers were still more likely to be early adopters of new technology than any other country. It was this technology that allowed us to shop from home.
'Compared to other European countries, there was a much higher use of personal computers in the UK,' says Professor Joshua Bamfield, director of the Centre for Retail Research. 'And the government put a lot of effort into ensuring that Britain would take advantage of the internet and digital computing.'
Take advantage it did, its geography making it particularly well-suited to the quick delivery of items ordered online. In a relatively densely populated country like Britain, the consumer gets their goods quickly, while the economics make sense for the retailer.
'We're a small island, so it's very effective to do online retail from a profitability perspective,' says retail analyst Catherine Shuttleworth, chief executive of marketing agency Savvy. We also have a 'very strong retail industry, for all that we're constantly moaning about it,' she adds. 'We've got one of the strongest retail industries in the world.'
In November 2006, 2.8 per cent of the country's total retail sales were made online, Office for National Statistics (ONS) figures show. By December 2024, this figure had soared to 29.3 per cent – down from a pandemic high of 37.8 per cent in January 2021, but still significantly more than the pre-pandemic high of 20.2 per cent in January 2020.
As online shopping gained in popularity, Britain's distribution network sprung up to meet the demand. The number of business premises used for transport, logistics and warehousing in the UK almost doubled in the decade to 2022, according to ONS data. As early as the late 1980s, the phrase 'golden logistics triangle' was coined, initially describing an area around Magna Park in Lutterworth, Leicestershire, so-called because of its connectivity with the rest of the country.
By 2022, the ONS estimated a 'golden logistics triangle' lay within a four-hour drive of 90 per cent of the British population. The area covers 289 square miles in the West Midlands.
'We were in [online retail] early in the UK, it scaled up fairly quickly and we've really embraced it,' says Shuttleworth. 'Plus we're a nation of shopaholics.'
We're also a nation of social media users, with social media sites now serving as key conduits for internet shopping.
'The introduction of shoppable links on social media platforms offers consumers an accessible way to shop online,' noted a report on the growth of online retail by estate agents Savills in November.
Data suggests the UK has a high social media penetration rate compared to many other countries. In January 2024, 82.8 per cent of the population were social media users, according to figures from DataReportal. This compared to 78.2 per cent of France's population, 81.4 per cent of Germany's, 70.1 per cent of the USA's and 74.2 per cent of China's.
What we're less likely to purchase through social media are groceries, which account for around half of our expenditure, says Jonathan De Mello, retail consultant and chief executive of JDM Retail.
'During Covid, grocery penetration for online [the ratio comparing online performance against the total market] went up hugely,' he says. 'There was a big sea change. It [then] stayed high.'
In 2023, 13.1 per cent of all grocery sales were online, according to Mintel data. In mainland Europe, it's a fraction of this, says De Mello. Other European countries 'don't tend to have as competitive a market' when it comes to groceries.'
For non-grocery purchases, we also have a competitive delivery market. 'It's probably more competitive than anywhere else,' suggests De Mello.
The flipside, of course, is those hollowed out high streets around the country; that long list of big name brands that have failed to survive the e-commerce revolution. When Woolworths fell in 2008, an outpouring of grief and nostalgia ensued. Today, we're used to such endings for our once-loved stores.
In their place has come the dangerous ease with which we can click our way through our bank balances. Between eight and 16 per cent of the UK population is estimated to be affected by compulsive buying disorder, according to the Priory Group. Other estimates are more conservative, with UK Addiction Treatment Centres putting the figure at 0.75 per cent in 2023. Ironically, perhaps, multiple guides to shopping addiction recovery can be purchased on Amazon at the click of a mouse, giving a new meaning to the term 'circular economy'.
Most of us are not addicted, but our lives have nevertheless been transformed: where once we would have commuted to work and shopped in our town centres and on local high streets, many of us now work flexibly, often from home, and shop from our phones and laptops. If this trend was in evidence before the pandemic, it was turbocharged by Covid.
The problem of how to draw shoppers back to struggling high streets has prompted much handwringing and few conclusive answers. In the climate-conscious 2020s, making it easier to drive to high streets and park there may seem like a retrograde step; but car-unfriendly centres are a commonly cited reason for lack of footfall. So, too, are high business rates and rents.
'Local authorities are using car parks as a good way of getting money out of people without thinking 'this is messing up our town centres,'' says Bamfield.
It's hard not to notice this 'mess'. Easier to overlook is the way our out-of-town landscapes have likewise changed, with vast warehouses mushrooming beside motorways as high streets wither.
Though other countries may be on the same trajectory, visiting many mainland European towns and cities can still serve as a reminder of what lively shopping streets look like.
'We work long hours and we don't cherish weekends,' says Shuttleworth, who suggests the high street is trapped in a 'horrible cycle of doom', which few consumers are all that anxious to prevent.
'We're kind of not that bothered if the high street dies or not,' she says. 'We pretend we are, but we're not.'
We mourn the closures of our favourite shops, yet continue adding items to our online baskets. Our physical geography has changed and so have our habits. Our ecommerce success may be copied by other countries. But it may, also, in some ways serve as a warning.
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