Sales of environmentally friendly products are set to double in the UK by 2015, but will still only account for less than five per cent of total retail sales because of higher prices, according to latest research.
The report by the C
entre for Retail Research (CCR), commissioned by shopping comparison site
Kelkoo, predicts that
green product sales will double from £8 billion to £17 billion by 2015 in the UK.
However, the premium price of green products means their share of the total retail market will only account for 4.3 per cent. In 2010 UK consumers are paying a price premium of 44 per cent on average for green retail products, and although that price premium is expected to drop to an average of 36 per cent over the next two years, it will still be too high for many UK consumers.
This is despite greater environmental awareness and a shift towards green initiatives, according to those behind the report.
"Probably the single most important factor preventing a greater take-up of green merchandise in stores and the internet is price," said Bruce Fair, managing director of Kelkoo UK. "
Sales of green products will not become commonplace until suppliers give consumers better price incentives in-store and online to follow their consciences."
Green spending per household to increase £648 by 2015
The UK, along with Germany and France, has one of the biggest green retail economies in Europe. However, when it comes to spending per household, the UK average currently stands at £305, compared to the European average of £319 per year. British households are set to increase that spending to £648 per year, by 2015.
The CRR study defines 'green’ products as ones that are "environmentally friendly, sustainable, avoid excessive inputs of energy for
production or distribution, and can be easily
recycled". It examined the price difference between green and standard goods across eight product categories responsible for 84 per cent of total retail sales, including
food and drink, electrical goods, cleaning products and heatlh and beauty.
It forecast growth in all UK green retail categories over the next four years, with electricals, food and drink accounting for 72.5 per cent or £12.5 billion of all UK green retail spending.
Green electronics to overtake food and drink spending
The report predicts sales of green consumer electronics and lighting in the UK will overtake food and drink as the largest area of green consumer spending – soaring 230 per cent from £2 billion in 2009 to £6.6 billion by 2015 on the back of rising energy prices, a higher interest in
energy efficiency and tighter
regulation. By comparison, it says food and drink will have one of the smallest growth rates, growing by just 56 per cent (from £2.5 billion to £3.9 billion).
Green household and cleaning goods will see the highest price reduction over the next two years, dropping by 40.5 per cent – from 77 per cent today to 46 per cent by 2012.
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