Research firm IBISWorld expects electronic goods, such as iPads and gaming consoles, to be among the most in demand items this Christmas, forecasting total retail spending will jump 35.2 per cent this December compared with average expenditure over the previous 11 months.IBISWorld has forecast electronic goods spending will jump 56.2 per cent compared to the previous 11 months, suggesting many households defer these purchases until Christmas.
Total year-on-year retail sales are expected to grow 5.5 per cent, with electronic goods sales forecast to grow 1.4 per cent year-on-year.
IBISWorld senior analyst Stephen Gargano noted “all retail categories can expect a share of the spoils”.
“However, department stores are expected to outperform competitor categories with an anticipated sales spike of 94.1 per cent,” he commented.
“Department stores operate as a one-stop-shop, stocking a range of consumer goods. This holds them in good stead to benefit from an influx of time-poor consumers keen to purchase their Christmas gifts and holiday supplies in one location.”
IBISWorld additionally noted retailers will face a number of challenges throughout the holiday period.
Staffing presents a traditional challenge, with retailers requiring not only sufficient staff, but also the flexibility to cut back staff hours following the downturn in demand after Christmas, IBISWorld observed.
“If demand predictions are overstated, having too many staff may threaten profitability, especially once you factor in penalty rate payments for overtime and public holidays,” Gargano commented.
Another challenge will be effectively managing inventory, ensuring stock is available to meet Christmas demand, while overstocking will lead to significant excess inventory, which in turn may require drastic discounting, eroding profitability.
