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Retailers to spend most on software

Daniel Thomas
Despite the worldwide economic slump, IT spend by retailers and wholesalers in Western Europe will increase this year by 7.4% and 6% respectively, according to IDC research.

The analyst firm said software will attract the largest share of the spending by retailers, growing from $4,581m (£2,937m) in 2001 to $9,330m in 2006.

Wholesalers will also focus their IT budgets on software, IDC said, with double-digit growth every year between 2002 and 2006.

Cinzia Rinelli, senior research analyst at IDC's European vertical markets group, said the proliferation of mobile devices and the emphasis on cost cutting will drive the growth in software spend among retailers.

"With the increasing penetration of wireless devices among Western European retailers, the need for security software will increase," she said. "The need for cost cutting to increase profit margins will drive demand for SCM [supply chain management], collaboration software and CRM to enhance customer relationships."

In contrast, IDC said hardware spending will continue to decline in 2002 in both retail and wholesale markets, with flat growth of between 4% and 5% expected until 2006 and a compound annual growth rate of 3.2%.

Meanwhile, IT spend within the hotel and restaurant sub-sector is estimated to reach $176m in 2002, rising to $257m by 2006, IDC said.

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