Sales of European green goods set to double by 2015

The emerging European market for green consumer goods is set to double in value to €114bn (£95bn) during the next five years as the price premium on sustainable products begins to fall.

That is the conclusion of a new study commissioned by the Centre for Retail Research on behalf of online comparison site Kelkoo.co.uk, which found that while sales of green goods currently account for just 2.5 per cent of the entire European retail market, the sector is set to expand rapidly.

"The report said that the relatively low market share was unsurprising given that European consumers are currently paying on average 46 per cent more for green non-food items than the standard alternative, with green food items costing on average 25 per cent more.

"We can expect availability, green price premiums and consumer demand to change over the next few years, but probably the single most important factor preventing a greater uptake of green merchandise in stores and the internet is price," said Kelkoo UK managing director Bruce Fair. "Sales of green products will not become commonplace until suppliers give consumers better price incentives instore and online to follow their consciences."

However, the study predicts that sales of green products will gather pace in the next five years, doubling the value of the nascent market from €56bn in 2009 to €114bn by 2015. At the same time, green retail prices are expected to drop over the next two years, reducing the overall "green premium" to an average of 40.5 per cent.

The fall in the price premium is expected to be driven by the rise in demand for green goods as retailers increase investment in developing affordable sustainable products.

However, price reductions are expected to vary across product categories. For example, the study forecasts that the price of energy-efficient electrical goods is set to fall by an average of 19 per cent between 2010 and 2012, while green food and drink products will see smaller average price reductions of just 9.1 per cent over the same period.