So, consumer sentiment is better than in previous years. Australians have finally left behind the skittishness arising from the 2008 global financial crisis, and are more confident about their economic future. But why are they going to spend just $5 more this Christmas?
Well, to start with, that is an analysis and forecast by IBISWorld as we hurry into the peak shopping period ahead of Christmas. And, yes, it has an explanation for the apparent paradox.
“Despite record low interest rates, consumers are still being price savvy with their spending,” says IBISWorld General Manager (Australia) Karen Dobie. Besides, Aussies are going to stay on the path of paying down debt – using more of their debit cards, rather than charging their credit cards.
Food on the table worth a lot more
IBISworld reckons – after detailed analyses of reports on several distinct market segments – the average Australian will spend $1,215.30 on Christmas, just five dollars more than last year. The total spending this month will rise an estimated 2.2% to $28.1 billion.
The overall pie might be only just a little bigger but there are significant shifts within market segments, leading to some big winners. Online retail, with an 18% jump, is being billed as the biggest gainer even though the rate of growth is lower than that in 2012. Toys, games and video games is the second biggest winner, with a 7.8% gain in revenues, while eating out is predicted to rise 5.2%.
IBISWorld predicts Australians will spend $1.4 billion this month on online retail, $1.5 billon on toys and games, driven in the main by the release of new games consoles Xbox One and PlayStation 4, as well as blockbuster titles such as Grand Theft Auto V.
But dining will dwarf either in volumes – touching $10.6 billion, and maintaining a longstanding trend. Of this segment, $1.9 billion will be spent on dining out.
“Because Christmas is a special occasion, consumers are expected to splurge on expensive set menu and degustation lunches and dinners at high-end restaurants that they might not regularly frequent,” said Dobie.
According to IBISWorld, butchers and smaller fresh food outlets will do well this Christmas, with “positive consumer sentiment encouraging people to spend that little bit extra on local, premium produce.” However, spending on liquor will grow a slender, and slower, 1.2% to $1.3 billion.
“Despite this, there are several categories bucking the trend such as craft beers, boutique ciders and premium wines, which are enjoying significant growth as Australians embrace the concept of premiumisation and more people choose to replace quantity with quality when it comes to alcohol consumption,” said Dobie.
