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Government cuts unlikely to influence e-commerce sales

06 April 2011 - 11:40 by Simon Crisp

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Research suggests that the market for safe shopping online is unlikely to be drastically affected by the cuts to public sector finances which are being made by the UK's coalition government.

Statistics gathered by Kelkoo, suggest that 2011 is set to see online shopping in the UK rise by around 14 per cent, as a direct result of more bargain hunters heading to the internet to get cheaper offers than are available in the high street as purse strings tighten.

This month is being seen as the period during which austerity measures will begin to have a widespread effect on consumers across the country, leading some to refer to it as Austerity April.

A poll conducted by YouGov, has found that UK consumers will be spending about £90 a month less on food and retail items in 2011, equating to an annual saving of around £1050 per household or, to put it another way, around £2.35 billion taken out of retailer's pockets.

Forty-five cuts are being implemented in April, the majority of which will have a knock on effect, restricting the amount of spare cash most people have available to spend online or in stores.

National insurance is rising, income tax brackets are being revised down and the basic personal allowance is being increased, but YouGov found that 58 per cent of people are unaware about the changes that are about to be made.

Kelkoo MD, Chris Simpson, pointed out that while those in upper tax brackets may feel the pinch following the austerity measures this month, those on lower salaries may well be better off thanks to the changes.

The ultimate result of the measures is that more people will be turning to safe shopping online in order to secure the products they need at affordable prices.