IT budgets plunge 20 per cent as retail CIOs feel the squeeze

As the recession continues to hit the UK's high streets, retail IT directors are seeing their budgets shrinking dramatically.

IT budgets in the sector have fallen by around 20 per cent over the last year, according to research, and now equate to around 1.1 per cent of a retailer's sales, compared to 1.3 per cent last year.

Some 15 per cent of retailers are now making "large changes" in order to slash their budgets, the research found, with money spent on IT coming down by up to 50 per cent in some cases.

While the recession may be causing Britons to lose their fondness for shopping, retail CIOs are having to look closely at their technology purchases.

Retailers are putting the squeeze on IT budgets (photo credit: james_jhs via Flickr under the following Creative Commons licence)

With internet sales seemingly faring better than their bricks and mortar equivalent, ecommerce and websites are being marked out as one of the most important areas for investment by retailers.

The research, carried out by consultancy Martec International for BT's retail arm Expedite, found that retailers aren't neglecting in-store tech, however.

Around one quarter of companies are intending to replace in-store systems and retail is seeing an increasing use of mobile technology both in-store - where it can be used for stock management or delivery scanning, for example - as well as in the supply chain.