HITWISE UK CHRISTMAS UPDATE 

Supermarkets’ share of UK online retail increases by 50% in two years

London, Thursday 13 December 2007 Hitwise, the leading online competitive intelligence service, today reveals that supermarkets have increased their share of the UK online retail market in the run up to Christmas. A Hitwise custom category of the top 45 supermarket operated websites accounted for 6.6% of all UK Internet visits to Shopping and Classifieds websites for the week ending 8 December 2007, up from 4.4% for the same week in 2005. Furthermore, this figure is likely to increase for the week ending 15 December, traditionally the busiest week online for supermarkets.

Non-food sales hold key to growth; electrical and entertainment the biggest area

One of the main drivers of supermarkets’ growth online has been the increasing proportion of non-food items they are selling. None of the top 10 product search terms sending traffic to the Supermarkets custom category for the 4 weeks ending 8 December were food related, however nine of the top 10 product searches were for electricals or entertainment products, with ‘nintendo ds’ the most popular term. Other popular terms included ‘music downloads’, ‘laptops’ and ‘lcd tv’.

Figure 1: Top product search terms sending traffic to Supermarket websites in the UK, 4 weeks ending 8 December 2007

"Although their online market share doesn’t yet match their dominance on the high street, there is no doubt that supermarkets are gaining ground on their online rivals," commented Robin Goad, Director of research at Hitwise. "As with the offline world, this growth is being fuelled by non-food sales. Often this is achieved by setting up specialist micro sites in order to gain market share in a particular niche market. For example, Tesco Direct (http://direct.tesco.com) already has a 6% share of the Shopping and Classifieds – Department Stores category despite only having launched in September 2006, while Asda Electricals (http://www.asda-electricals.co.uk) increased its share of the Shopping and Classifieds – Appliances and Electronics category from 1.0% to 1.8% over the last year".

Supermarkets account for one third of UK online wine market

Another area of online retail that supermarkets have proved successful in is wine. Three of the top 10 wine retail websites in a Hitwise custom category for the week ending 8 December were operated by supermarkets, with Tesco Wine Warehouse (www.tesco.com/winestore) alone accounting for a quarter of all visits to a Hitwise custom category of the top 50 wine retail websites. Combined, the online wine stores of Tesco, Sainsbury’s and Waitrose account for one third of all visits to the category, while ‘waitrose wine’ was the second most popular search term containing the word ‘waitrose’ during the 4 weeks ending 8 December.

Figure 2: Top 10 wine retail websites in the UK, week ending 8 December 2007 (based on a Hitwise custom category)

About Hitwise:

Hitwise is the leading online competitive intelligence service. Only Hitwise provides its 1,400 clients around the world with daily insights on how their customers interact with a broad range of competitive websites, and how their competitors use different tactics to attract online customers.

Since 1997, Hitwise has pioneered a unique, network-based approach to Internet measurement. Through relationships with ISPs around the world, Hitwise's patented methodology anonymously captures the online usage, search and conversion behaviour of 25 million Internet users. This unprecedented volume of Internet usage data is seamlessly integrated into an easy to use, web-based service, designed to help marketers better plan, implement and report on a range of online marketing programs.

Hitwise, a subsidiary of Experian (FTS: EXPN) www.experiangroup.com operates in the United States, United Kingdom, Australia, New Zealand, Hong Kong and Singapore. More information about Hitwise is available at www.hitwise.com.

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Jannie Cahill

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