National Broadband News

Superfast broadband rollout could boost annual online sales by £740m

22nd August 2014
Superfast broadband rollout could boost annual online sales by £740m

Superfast broadband is boosting e-retailing and could result in a £740 million uplift in annual online spending once the rollout across Britain is completed.

The study for Royal Mail revealed that across the UK, online shoppers have increased their annual spending by £225 million since taking up superfast broadband. This equates to an increase in spending of 3.1%, or £23 a year, per superfast broadband user.

The analysis by the Centre for Economic and Business Research found that an additional £515 million could be added to online sales annually once the roll-out reaches the target of between 90 and 95% of the population by 2017. This would take the total increase in online shopping to £740 million each year.

The basis of the study was a survey of 1,412 adults in Britain with superfast broadband and 1,710 adults with non-superfast broadband. These results in conjunction with figures from OFCOM on superfast take-up up rates by local authority were used to calculate the £225 million figure.

The impact of superfast broadband roll-out on online sales varies significantly across the UK. Online shoppers in Scotland and Wales have increased their spending the most since receiving superfast broadband, at 5.1% and 4.4% respectively. 

This coincides with lower population densities in those parts of Britain (68 and 148 people per square km, compared with 407 for England) meaning distances from large shopping centres are likely to be greater and hence internet shopping more convenient, the report found.

Meanwhile, the South West of England experienced the lowest average increase at 1.4%. The South West has the highest average age of residents in the UK, and these findings may reflect lower comfort levels with online shopping among those in older age groups, said the study.

Nick Landon, Managing Director of Royal Mail Parcels, said: “Royal Mail’s study shows that the investment in superfast broadband networks is having a positive impact on spending online. 

“Superfast broadband is acting as a catalyst, encouraging people to spend more online and the further roll-out of networks across Britain over the coming years can only benefit the online retailing market. 

“To support the online retailing market, Royal Mail is continuing to explore ways to improve our flexibility and provide more options for people to receive items they have ordered online. 

“At the end of June our express parcels business, Parcelforce Worldwide, began delivering seven days a week when it launched Sunday deliveries. Royal Mail is to pilot Sunday afternoon opening at around 100 of its delivery offices across the UK.