Christmas shopping chaos just a click away

In a vast warehouse, the size of eight football pitches and around 15 minutes from the centre of Milton Keynes, more than a thousand workers are gearing up for what will likely be Amazon's busiest Christmas yet.

Products from kettles to keyboards, ping pong balls to DVD box sets are stacked densely on four floors of shelves, on a structure known as the "library tower", a large edifice in the middle of the distribution centre.

As the business has grown the company has built up toward the eaves of the warehouse. Pickers weave their way through, shoving items in yellow plastic crates and sending them on a conveyor belt for packing, like latter-day elves.

With Christmas approaching, online retailers are readying for what has become known as "cyber Monday", the busiest internet shopping day of the year that commonly falls on the first Monday of December.

On cyber Monday last year, December 8, Amazon claims that 1.4 million items were ordered from its UK site, over 16-items per second and the most it has ever received in a single 24-hour period.

This year, Amazon is forecasting that sales will be 21 per cent to 36 per cent higher. It has hired several hundred extra workers for the Christmas period.

The firm has contracts with several delivery firms as well as Royal Mail and maintains that it would be unaffected by any potential disputes. "This will without doubt be our busiest Christmas ever," said Allan Lyall, vice-president for European operations.

"Around this time of year we are looking at two to three times our normal run rate. Last year a delivery truck was leaving the warehouse every five and a half seconds."

Bigger and better

Milton Keynes is one of four Amazon distribution centres in Britain there are two in Scotland and the largest is in Swansea. Milton Keynes appears to be the land of distribution centres.

There is an even larger John Lewis warehouse on the way to Amazon, serving the stores and customers of the John Lewis website, and giving the impression that, sensibly enough, not much hangs around in Milton Keynes for very long.

Amazon has set up a fifth temporary centre in Peterborough to help it cope with the Christmas demand.

Like high-street retailers, online shops have not been immune to the recession. But as the high street faces another possible bloodbath, many online retailers are at least still growing, owing to the deepening penetration of broadband, consumers becoming more comfortable buying online and cash-strapped shoppers hunting for bargains.

Figures for the growth of online shopping vary. According to the Office for National Statistics, online sales accounted for 3.5 per cent of total retail sales during December last year, with average weekly sales of 238 million. But if the percentage is still relatively small, it is growing. The ONS said online sales during that month were up 19.6 per cent on the previous year.

IMRG, an industry group that represents internet retailers, perhaps not surprisingly reckons the figure is much higher, although it also includes ticketing and travel. It suggests that internet sales now make up between 10 per cent and 15 per cent of total retail sales in Britain.

Amazon's rise

Amazon has grown steadily since it was launched in 1998 and claims 98 million people worldwide have bought something from one of its sites in the past year.

The Seattle-based business has broadened its range from books, most recently starting a UK online shoe shop, and moving into office equipment and lighting although media, including books and DVDs, still account for a little over half of Amazon's global sales.

David Smith, director of operations at IMRG, says the fastest growing categories online are clothing and electricals. Recent results from Asos, the online fashion retailer, would certainly appear to partly support that.

The company last week reported operating profits of 4.4 million for the six months to the end of September and sales in the UK were running 33 per cent higher than the same period a year earlier.

Web focus

"The rate of growth has slowed because of current economic conditions, but sales online are still growing," Smith said. IMRG is forecasting growth of online sales of around 15 per cent this year, compared to previous rates of 35 per cent to 50 per cent.

"More and more people are doing their research online as well and comparing prices, so the influence of the internet is still growing."

Amazon and Asos are facing increasing competition from the high-street brands, many of which are beginning to take online retailing more seriously.

When John Lewis launched its website in 2001, the aim was to eventually generate the sales of a medium-sized store about 100 million. Last year they reached 327 million, outstripping its most successful department store and accounting for about 13 per cent of the John Lewis division of the group.

In London and Birmingham this year, Amazon is guaranteeing delivery ahead of the big day for any orders received before 8.30am on Christmas Eve, for a fee.