By Keri Algar
SYDNEY, NSW: Disastrous October sales results coupled with November’s rate rise are factors leading to the dismal December outlook, according to economic consulting firm Access Economics. However, economic undercurrents this year could mean a more prosperous 2011.
“While Christmas looks like recording only modest sales growth for the traditional parts of retail compared with last year, we do expect there will be a better news story for retail in 2011,” according to the Access Economics report, released today.
“That will be driven by the strength of job gains in 2010, which look like continuing into the early part of 2011 at least. The gap between income growth and consumer spending growth should narrow. We also expect that purchases of retail items will start to account for a higher share of overall consumer spending than has been the case of late.
“The strong Australian dollar is also part of this better news story for the retail sector in 2011. In the short term that may mean more direct purchases from overseas, but in the main it’s still a good news story for Australian retailers (in large part as it has allowed them to expand their margins).”
Meanwhile, the Australian Retailers Association (ARA) has said electronic goods are popular with consumers this Christmas.
“There will always be some gifts that are consistently popular at Christmas time but it’s really a sign of the times when e-readers (11 per cent) will share space with hard copy books (over 70 per cent) under the tree this year,” said ARA executive director Russell Zimmerman.
“Overall the popularity of electronic gifts has risen this year with almost 52 per cent of shoppers planning on trawling the technology aisles for gifts this Christmas (up from 46 per cent last year).
“Almost 20 per cent of Christmas shoppers are planning to purchase iPads and over 34 per cent will buy MP3 players and iPods."