E-commerce drives 22% surge in commercial vehicle investment

The growing popularity of online shopping has led to a 22% increase in investment in fleets of trucks, vans and other commercial vehicles, says finance provider LDF.

The company said the value of asset finance used by businesses to fund commercial vehicles has risen from £4.9 billion to £5.9bn in the past year (year end October 31).

LDF added that as e-commerce and m-commers take a bigger slice of the retail sector, rising demand for delivery services is leading to increased investment in delivery services by high street retailers, as well as the logistics services that deliver for online retail giants like Amazon and ASOS.

The unexpected size of the Black Friday retail surge in late November led to delays in delivery for Marks & Spencer, Debenhams and Tesco, after British consumers spent an estimated £810 million online in a single day – 50% more than predicted.

The major online supermarkets also saw significant increases in sales in the past year, said LDF – Tesco’s online sales rose 11%, while Sainsbury’s have risen 10%. Online-only competitor Ocado has seen a 15% jump.

LDF said retail businesses have now come to terms with the UK’s ‘retail revolution’ and are now investing in the delivery vehicles that will allow them to compete in the online market, and keep delivery times within customers’ expectations.

Peter Alderson, managing director of LDF, said: “No retail business that targets long-term growth can afford to ignore online sales, and any major retailer without a significant online presence is already playing catch-up. That has led to a big surge in investment in delivery vehicles over the past 12 months.”

“Consumers now expect their purchases to be delivered within a day or two, and a wait of a week for delivery might mean a customer goes elsewhere to buy. Retailers that have a reputation for quick delivery have a definite advantage in the online market.”

“Some retailers have struggled with the volumes they had to deliver through the ‘Black Friday’ period, and that is likely to have focused minds in senior management across the sector on the need for further investment in vehicles.”


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