Rail chaos hits Xmas online profits

Business-to-consumer experts believe e-tailer finance directors, desperate to reverse a poor year, face a make or break situation over the next fortnight if they don’t win customer confidence.

The Post Office last month predicted 60 million out of 150 million items would be delivered daily by rail, but has doubled to 67 nightly air flights because of the delays.

Traditional retailers are expected to benefit if last minute panic grips online buyers.

UK e-analyst Di’rekk predicted total online parcel shipments to e-retail consumers this December could amount to 1.6 million.

‘A lot of online retailers use the mail because it is the most cost effective form of distribution,’ said MD Will Lewis. ‘Nervous buyers will go out to the high street and buy the gift again rather than wait for the delivery to arrive and there will be a lot online returns in the new year.’

Steve Frazier, MD of Amazon UK, commented: ‘We are in constant talks with the Post Office to make sure we deliver before Christmas.’

Ernst & Young estimates that UK consumers will spend 23% of their total Christmas purchases online this year compared to 14% a year ago.

E&Y e-commerce partner Tim Gordon said: ‘Online companies that don’t deliver as promised over the Christmas period will suffer, and could be in for a shock in the new year.’

But FD, Julian Culhane, said: ‘We are not concerned about Post Office delivery problems.’

A BT survey this week found that four out of five online companies lacked adequate distribution systems.

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