The net effect of web shopping

With Christmas fast approaching, technology buffs are predicting that many more people than last year will spend the 12 days trying to do some internet shopping - though of course the overall total may include some diehards still trying to log on from last year.

Rude comments aside, if expert forecasts of £2 billion sales actually come through, it will signify a sixfold increase on last year.

The way internet shopping has changed is interesting. When it started we were told it would be so much cheaper than conventional retailing that it would put shops out of business. We were told it would become second nature to shop around for the cheapest offer and either buy direct or tell the local retailer he had to match the price.

It's a different story now. Internet retailing no longer claims to be the cheapest. Goldfish, the credit card company, sponsors an equivalent to the Retail Prices Index for goods available on the internet. For months it has been reporting that prices have been rising faster than inflation. Latest figures out this week show a 12-month rise of 5.3% - twice as much as goods have risen in the shops. Within that overall total, some seasonally-popular items have risen even more.

Websites have belatedly discovered what any old-fashioned snail mail order firm could have told them before they started - it costs money to develop warehouse systems, stock controls and delivery channels.

Their low prices were losing them money. Their solution therefore has been to put their prices up and position themselves not as the cheapest way to shop, but as the most convenient. Few suppliers are prepared yet to charge aggressively for that convenience but they are heading in that direction. By next Christmas paying more to shop on the web will be the norm.