The report released by Verdict Research expect to see online spending by consumers on retail purchases rise by a substantial 13.3 per cent to £20.9 billion.

This growth is in vast contrast to the total UK retail market which is suffering a historical decline.

Despite the Internet slowing down and the market becoming more competitive the report, ‘UK e-Retail 2009′ predicts that online retail is set to reach £31.2 billion by 2013, accounting for 10.0 per cent of total retail spending.

Malcolm Pinkerton, Senior Retail Analysist at Verdict Research and author of the report, said, “The key for individual retailers is to formulate two clear strategies, one for succeeding through the recession and one targeting growth beyond this, as the online channel begins to approach maturity.”

However, in 2009 total retail growth will contract by 0.6 per cent as consumer spending is hit by the gruelling recession.

The online market, on the other hand, will continue to grow over the course of the year, driven by continued increases in the number of Internet shoppers and higher expenditure per head.

This growth is following a trend seen in 2008 when there was a 1 per cent increase in Internet users to 34.4 million and an 18.1 per cent increase in online shoppers to 26.7 million. Each of these individuals spent an average of 5.8 per cent more in comparison to 2007.

One of the driving forces sending people online is that Internet prices are generally cheaper than they are in physical stores and shoppers are more easily able to search for bargains, including second-hand goods.

This growing craze of Internet shopping is most popular with the more affluent and therefore more resilient AB shopping class. For this increasingly time-pressed group, making effective use of their limited leisure time is of the utmost importance. In fact, Verdicts reports stated that the AB group is now responsible for a massive 56.8 per cent of all online spending.

“Those with less money to spend are turning to the Internet to search out bargains on branded items like electricals,” said Pinkerton.

“Additionally the more affluent groups, who do still have money to spend, continue to appreciate the Internet for convenience, making the channel doubly resilient in the downturn.

“There is some evidence that the most financially squeezed shoppers are abandoning the internet in favour of cheaper high street shopping at the likes of Primark, Matalan, Poundland and the grocers, particularly in sectors which retail smaller, lower priced items, such as homewares, DIY and clothing.

“But overall this is being more than outweighed by increases in bargain hunters looking for larger, branded items and the loyalty of those most financially comfortable consumers who continue to value convenience over price.”

For more information about the 2009 report visit Verdict

BT is axing 15,000 jobs, which is around 10% of its workforce, over the coming year as it attempts to save money after reporting a huge drop into the red and warning that revenues will fall this year.

Over the last three months the company have suffered a £1.28bn loss, which has moved its annual loss to £134m.  BT, which has already implemented a pay freeze this year, affecting all staff, has also cut its dividend to shareholders. They said that the global CREDIT CRUNCH has created a huge hole in its £29bn pension fund, the largest private sector pension scheme in the UK.

The expected dividend is 1.1p, making the full-year payout to shareholders 6.5p for the year, a large decrease from last years 15.8p. It is hoped that this will save the company over £700m.

To repair the damage to the scheme, which has 360,000 members, British Telecom will up its annual payments to £525m over the next three years, from the current amount of £280m.

The increased pension contributions accompanied by the dismal performance of the company’s IT business, have forced BT into a cash squeeze.

The company said it plans to cut operating costs and capital expenditure by more than £1bn this year, it has already axed 15,000 jobs over the past year – a third more than had initially been anticipated – and the company admitted today that it expects to lose a similar amount this year.

Deputy general secretary of the Communication Workers Union (CWU), Andy Kerr said: “15,000 is a very challenging level of job losses especially on the back of last year’s reductions.

“We expect the majority of job losses to be third party – contractors and agency staff – as they were last year with many jobs being lost outside of the UK. However, this is a serious day for staff at BT.”

Kerr added that they were working closely with the company to ensure that losses made are voluntary, as ideally, they would like to keep permanent employees. 

Supermarket chain J Sainsbury fought back against the recession, unveiling full-year profits, up more than 11% at £543m.

The UK’s third biggest supermarket chain attributed the improvement to its efforts to help cash-strapped shoppers cope with the economic downturn.

It has been running a high profile “Switch and Save” campaign to push consumers to switch to lower-priced own-label alternatives. They also moved advertising focus away from indulgent food images to emphasis on price, with campaigns showing how to feed a family for £5 and make meals from leftovers.

Sales of the “Basics” range of foods are up 60%, while chief executive Justin King said its premium-priced Taste the Difference range is “flat to down a little.”

The chain reported that like-for-like sales, which exclude gains from new shop floor space, were ahead 4.5% in the year and total sales were up 5.7% to £20.4bn.

The supermarket said it has seen shopper numbers rise to 18m a week and has been welcoming customers from rivals including Tesco  and Marks & Spencer. 

Market leader Tesco has lost thousands of shoppers to hard discounters like Aldi and Lidl and is now relaunching its Clubcard to remind shoppers to stay loyal to the Tesco brand.

Prior to the good news for Sainsbury’s, market research group TNS showed that the store has a market share at 16.3% – its highest for several years – while Tesco has fallen from 31.8% to just over 30%.

The full-year profits growth is better than the increase posted by Tesco and Morrisons. King said his method, which has now delivered four successive years of like-for-like sales growth, had put the supermarket in “a strong position”: “Although consumer confidence in the UK has declined during the year, our performance improved as a result of the strength of the Sainsbury’s brand and actions we have taken to adjust our offer to changing customer trends.”

Enterprise Inns’ eradication of struggling landlords has cost the company £5m over the last six months as it fights against the downturn.

Britain’s second largest pub company announced that the recession had forced it to take action against more than 100 “poor quality and underperforming licensees” since last autumn.

This has caused a loss in sales, non-payment of rent, reopening costs and legal fees at a time whenthe pub industry has already been seriously afflicted by a lack of consumer spending.

Ted Tuppen, chief executive said Enterprise had been forced to take “robust action” as, the current financial climate has meant many underperforming landlords are unable to offload their pubs.

“In more normal times, an underperforming landlord could move on by selling the license to someone else, and we could get someone else good into the pub to repair the damage. But clearly there are many fewer buyers today,” Tuppen explained.

Across 7,616 pubs, Enterprise is spending £1.4m a month on financial assistance to help those in distress, on top of the £700,000 a month cost of freezing the price of five lager and ale brands.

“If people are genuinely struggling and will work with us, we are providing an awful lot of help,” said Tuppen.

Tuppen confirmed that Enterprise had profited from the good weather over Easter, but was very dubious about whether the worst of the financial crisis was over.

“Our economy is in such appalling shape that caution is the only sensible approach to take,” he said.

Like fellow pub boss Tim Martin of JD Wetherspoon, Tuppen is also appalled by the government’s approach to the industry.

“We have seen a 20% hike in duty in the last 12 months, which is pretty aggressive. The pub industry employs tens of thousands of people and generates billions in taxes, so you’d think the government would want to support it.”

 Oxfam have today revealed the implications of the recession on its shops as it reported that donations have fallen by 12% this year.

Despite this blow, sales in its network of 714 shops remain strong – up 5% on last year – as the credit crunch also means demand for donated goods remains high.

Over  80% of Oxfam’s total income from its shops comes from donations of clothes, books, music, homeware and other goods.

But with less people moving house the charity has witnessed a huge plummet in donations of household items such as,  crockery, china, glass and curtains, which are down by 7% so far this year, while furniture donations have dropped by 13%.

Clothing donations would have been down by 8% had it not been for an extra 900,000 donations resulting from a partnership scheme with Marks & Spencer, which incentivises people to take in their unwanted M&S clothing in exchange for a £5 voucher.

The decline in donations clearly denotes wider trends resulting from the credit crunch: families begin to budget and buy less, which means they replace less and therefore have less to pass on to charity shops.

The charity warned that the  12% fall in donations so far could mean 1.2m fewer items are available to sell this year.

Oxfam’s director of trading, David McCullough, said: “The £20m profit made by our shops last year would be enough to fund all of Oxfam’s work in DR Congo, Tanzania, Uganda, Ethiopia and Somalia for a year. But we can’t sell fresh air, and [the shops] of course rely on the generosity of the public for their stock.

“Without continued donations of everything from clothing to cookware, Oxfam shops could not continue to play such a key role in communities across the UK.”

The worst-hit areas for donations include  North Yorkshire, north London, Nottinghamshire, Devon and Cornwall. The West Midlands, Tyneside, Teesside and south Wales, are a few of the areas fairing well, in spite of the economic climate.

However, Oxfam does not stand alone, other leading charity shops said they were also feeling the pinch. A spokeswoman for Cancer Research UK said: “We’re in a similar situation. While we know, anecdotally, that footfall has increased, we are in desperate need of stock to sell. We have found that donations to our shops have dropped significantly.”

The British Heart Foundation, which has 580 shops selling clothing, books, DVDs, CDs, toys and bric-a-brac, and more than 60 BHF furniture and electrical stores, said it had experienced a similar slump in donations.

The British department store chain, John Lewis, is planning up to 50 specialist home stores to target middle-class shoppers in smaller towns across the UK and Ireland.

Currently, the store have yet to name the chain of new shops, but the first is scheduled to open in October at a retail park in Poole, Dorset. The shop will stock two-thirds of the usual furnishings, homewares and electronics but will  be just 5.1000 sq metres, making it about a third of the size of a standard John Lewis store.

The Poole outlet will be monitored closely and if successful the idea will be rapidly extended around the country.  John Lewis managing director, Andy Street said:”We will act at pace. “This is a significant departure for our business. Poole will be our first new-format shop for 20 years.”

Each of these new stores will create more than 100 jobs, although only 30% will be full-time. Gareth Thomas, retail director, said he had identified “30 to 50 sites that could sustain this sort of shop” – which, he said, would have the look and feel of a John Lewis outlet, not an Ikea-style shed.

Last week, figures released by John Lewis showed that sales of homewares across the group are down more than 12% so far this year, while electricals and technology takings are down 7.4%. Sales at 16 of the department stores have sunk more than 10% on 2008 levels.

Additionally, several high-profile homewares retailers have collapsed, including MFI, New Heights and Land of Leather.  The new John Lewis store – which will cost £6m to open – will be located in former Courts furniture store, which has been empty since Courts went under in 2004.

Thomas admitted that the move into home stores – which will sell furniture, electrical goods, linens, cookware, gifts and haberdashery – was “counter-intuitive” in the current economic circumstances. Sales of homewares have been low as economising Britons have cut back frivolous spending and the housing market has taken a dive.

The company have acknowledged that the new chain is serving as a type of Plan B for the department store business, which currently has 27 outlets.  Previously, the group had announced plans to open at least 10 new full-size department stores and a number of smaller stores. However the housing market crash has put almost all  expansion plans on hold.

Only the John Lewis stores in Cardiff and Stratford, east London, are now certain to go ahead in the next two years. Ambitions to open in Leeds, Sheffield, Oxford, Portsmouth, Crawley, are no longer a priority.

Despite these setbacks, the retailer has not been deterred and worked fast on the new format – the first shop will open just a year after research started for the idea.

As it prepares to re-launch next week, the Evening Standard are in a worrying position following a fall in net circulation.

The latest ABC figures for April show a 6.11% drop in net circulation from March to 263,312.  The title is also down 1.01% for the six months from November to April, year-on-year. Of the circulation total about a third were given out as “bulks” in April.

However, the latest ABCs show the national tabloids dropping an accumulated 3.96% for the six months November to April 2009 year-on-year. News International’s The Sun fell below 3 million again after struggling back above commercially important figure in March.

The Standard which is now under the ownership of Russian oligarch Alexander Lebedev, will relaunch on Monday (May 11) under the title London Evening Standard. It will be backed by a huge promotion offering 650,000 copies of the 50p paper for free for the day.

The re-launch edition will follow on from a teaser advertising campaign saying “Sorry” to Londoners for the paper’s editorial stance under previous owner Daily Mail & General Trust.

Since Lebedev took control of the paper, it has seen a series of inventive pricing and distribution models.

In February, the Standard began to trial a tiered pricing system with copies offered free or heavily discounted in key locations late in the evening.

Additionally, it has introduced a strategy that includes offering the paper for 10p to late-night travellers at all mainline London stations.

Yesterday evening the Standard was being distributed for 10p outside the Lord’s cricket ground in north London, where England are playing a Test match against the West Indies.

DMGT’s afternoon freesheet London Lite and its News International rival the London Paper are handed out to homeward-bound travellers free until about 7.30pm.

As well as the latest ABC figures, it emerged yesterday that Lebedev has been forced to delay payment to 120 journalists on Russian newspaper Novaya Gazeta, in which he owns a 39% stake.

The setback has been attributed to cash-flow problems linked to the grounding of his budget German airline Blue Wings

Supermarkets and retailers of hygiene products are having to meet the sudden surge in demand, following the Government’s nationwide swine flu information campaign.

As the virus is mainly contracted through the respiratory system, basic cleanliness has been stressed causing sales of soaps and tissues to rapidly rocket.

Retailers of anti-bacterial hand gels, soaps and tissues are experiencing a sales increase following the government’s swine flu initiative which urges people to “catch” sneezes, wash their hands and keep surfaces clean to avoid spreading germs.

Superdrug says sales of antibacterial hand washing products were up 70% over the seven days to Monday 4 May compared to the same period last year, while Sainsbury’s reports its range sold 39% more over the past two weeks compared to the same period in 2008.

The supermarket has notes a rise in it’s year-on-year tissue sales over the same two-week period, to 15%. Marketing manager of Kimberly-Clark’s Kleenex, Marc Zander said that the brands Hygiene Kit have experienced a 100% surge since the launch of the government campaign.

His week, Kleenex launched its own press ads, radio sponsorship of weather forecasts, sampling and a mailer to primary schools directing them to the company’s “Sneezesafe” programme supported by the Department of Health.

Soap manufacturer PZ Cussons reported that sales of its Carex brand, which claims to kill 99.9% of bacteria were up “substantially”.  As a result, the group has increased production to meet demand.

 The first cases of swine flu were discovered in Mexico, and came to world attention almost 14 days ago. Co-op has advised customers in the Midlands who are traveling to Mexico or the USA to visit stores to get up-to-date information. Postponements or alternative destination are on offer.

Since the outbreak, there has been a lot of confusion over whether it’s still safe to eat pork.  In response to consumer fears, Waitrose has stressed that the virus is not passed on from food products, but is airborne and it stated that there was no need to avoid pork products.

Following a 97% drop in net profit to 5 million euros during the first quarter of 2009, Adidas is to restructure its regional operations.

The German sportswear brand has seen a worrying 6.6% fall in share prices as net profits sunk from EUR169m (£150m) to EUR5m (£4.4m) a year based on the January to March results.

The company has already cut 750 jobs over the year, mostly through layoffs at brands like Rockport, Reebok and TaylorMade Golf.

 Adidas chief executive officer, Herbert Hainer, said he plans to cut regional headquarters across Asia and Europe; close stores and consolidate the company’s wholesale business in order to tackle the problem.

In a statement Hainer said the company had encountered a number of economic and market challenges over the first quarter, but was positive that the proposed cost cutting measures would result in a welcomed outcome.

The money saving measures includes overhauling the Adidas management structure and cutting out regional offices. The company said that earnings in the second half of this year would get a “significant” lift from World Cup sales.

Hainer added: “Our results have been materially affected by higher input prices, currency devaluation effects and restructuring costs. Although some of these items will recur again as we go through the balance of the year, I am convinced we will put most of these effects behind us in the current year.”

Ingbert Faust, analyst with Equinet accepted that there would be some improvement in the second half of 2009, particularly if demand in the United States and China enjoyed a revival.

Unfortunately for Adidas the more problematic European market accounts for nearly half of their total sales, and is highly likely to be the reason why the company still expects a low rate of decline in annual sales this year.

 Last November, the company launched a star-studded campaign titled; “House Party” featuring celebrities such as Katy Perry, David Beckham and Missy Elliott to mark the brands 60^th anniversary. The integrated campaign carries the tagline “Celebrate Originality.”

The books chain, Waterstone’s have announced that they are to axe up to 650 jobs as a result of new cost-cutting measures.

The redundancies, the books shop said, are due to a move to a new distribution centre in Burton-on-Trent, which will result in store managers ordering from the central hub rather than from individual suppliers. The hub will also deal with online sales.

The cuts are also part of an initiative to increase focus on part-time jobs and the job losses will take place from the end of the month, which are equivalent to 450 full-time roles, but goods-in and returns staff in stores will be most affected.

Last week Simon Fox, chief executive of Waterstone’s parent company HMV, said the total book market – including both Internet and shop sales – was down 4% over the last year. He added: “We are focusing on successfully completing the migration to the Waterstone’s book hub to help to improve financial performance.”

Waterstone’s, which has more than 300 stores and 4,500 staff, stated that the job cuts were essential “in spite of considerable efforts to minimise the effects of the changes”.

By the end of June the brand is expected to post annual profits of about £58m. This is a huge blow, as four years ago it made more than £130m.

Fox assured that despite this, Waterstone’s had held market share and that sales on Waterstones.com were up 70% over recent weeks – even though it was from a low starting point. He added that in the most recent weeks the market was down by some 3%.

The Waterstone’s job cuts have come just as Restaurant Management Services, which operates Pizza Hut outlets in Northern Ireland, fell into administration. Of the 14 outlets, five are to close immediately with the loss of 130 jobs, and 160 additional jobs are expected as administrator Moore Stephens tries to secure buyer for five more restaurants.

David McClean, of Moore Stephens, said he had “no option” but to close some of the outlets with immediate effect. He added: “The company’s financial situation has been exacerbated by the current economic downturn.”