Looking cheaper and cheaper every day......
Posted at 7:29 p.m. PST Sunday, November 28, 1999
Videos and music poised for
online boom - Verdict
LONDON (Reuters) - The UK music, video and software industry
is on the brink of an electronic shopping revolution, with online sales
forecast to rise to 20 percent by 2004 from only 1.5 percent
currently, a report said on Monday.
Retail consultants Verdict said a significant number of online stores
already offer an extensive range of the merchandise at highly
competitive prices.
''This is proving a major catalyst toward lower prices across the
sector,'' Verdict said in its latest survey of UK music and video
retailers. ''The outlook is for more deflationary price movements and increasing margin pressures
on all main players.''
Verdict sees the UK music and video market growing by 9.5 percent in 1999, against growth of 10
percent in 1998, when the total UK market was worth 4.1 billion pounds.
To offset the online threat, many of the traditional retailers have added Internet shopping to their
offer, which may broaden their customer base.
Woolworths (KGF.L), the high street chain, was the market leader in 1998, with a 13.7 percent
share, followed by specialist HMV with 12.0 percent. But Verdict believes Woolworths market
position could be under pressure because it is a non-specialist without clear product authority.
UK supermarkets, led by Asda (WMT.N) and Tesco Plc (TSCO.L), have grabbed an increasing
share of the market by offering competitively-priced best selling titles.
Market penetration by the supermarkets has grown strongly from only three percent in 1992 to 11
percent currently. ''Verdict expects this to continue, with 15 percent achievable within five years,'' it
said.
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