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Retailers count on electronics to lure Christmas shoppers

| 26.11,11. 03:52 PM |


Retailers count on electronics to lure Christmas shoppers


November 26, 2011

A MONTH out from Christmas and it's not as much ''ho ho'' as ''ho hum''. Retailers can, at best, hope to tread water this Christmas, staying afloat for a third consecutive year where the increase in Christmas spending barely meets the rate of inflation.

But a tide of electronic gadgets attracting younger people, along with the prospect of a cut in interest rates flagged for next month, may deliver the retail sector a last-minute king tide.

A survey of Christmas spending intentions by Westpac found more than a third of consumers intend to cut back this year compared to last. More than half plan to spend about the same, while a little more than one in 10 say they will spend more.

Advertisement: Story continues below The average shopper will still spend more than $1200 in December on Christmas-related commodities, pouring about $27 billion into the economy, according to an analysis by the market researcher IBISWorld.

Matthew Hassan, a senior economist at Westpac, conceded there could be a disparity between what a lot of people said they were going to spend on Christmas and what they actually spent (usually more).

No follow-up surveys are done to ask people on how much they overspent.

''I suppose we all go into Christmas with the best of intentions, that we're going to be disciplined in our spending intentions.''

But by repeating the same set of questions each year, consistency had delivered a fairly accurate picture of consumer sentiment in December.

''What we have seen, this year, is that the intention to cut back in spending seems to be driven by women, while men are planning to spend about the same as last year,'' Mr Hassan said.

A significant contribution to the predicted $27 billion festive spending will be the sale of electronic gadgets. E-readers and the iPad2 and iPhone4S could save Christmas from being a fizzer, said Craig Shulman, a senior analyst at IBISWorld.

Not only have such gadgets contributed to an 8.1 per cent growth in the electronics sector in the past 12 months, they have also helped increase online spending - 19 per cent of retail transactions on the web pour into the electronics sector.

''We have people at a younger and younger age getting involved with electronic goods.

''They are more part of how we live our lifestyles … and something like an iPhone or iPad is also seen as something special, that a spouse might give,'' Mr Shulman said.

''These things become more appealing over Christmas.''

Growth in online spending, which admittedly is still quite modest at just more than 4 per cent of all retail activity, is only eclipsed by one other festive activity, eating out, which has grown 9 per cent in the past year.


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