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Selfies are set to grow even more popular this Christmas, as selfie sticks prove a hit with buyers. Source: News Corp Australia
The selfie stick is tipped to be Australia’s top Christmas gift this year. Source: AFP
SANTA Claus will be delivering selfie sticks, fitness wristbands, digital cameras and games consoles this Christmas but not all retailers will be making his “nice†list, with most ASX-listed companies to miss out as restaurants and other diversions grab a growing share from people’s wallets.
In a new report from broking firm Citi titled “What’s hot for Christmas 2014â€, analyst Craig Woolford warns that retail spending trends are slowing in the lead-up to Christmas.
Mr Woolford has also sounded the alarm that consumer electronics retailers will be the only ones benefiting from Santa’s cheer, with clothing sales soft and relying on promotions and discounts.
Post-Christmas clearance sales may also disappoint, given a pull-forward of demand.
When it comes to what will be under the Christmas tree this year, Citi cites market research and industry feedback to predict that the top gift for Christmas 2014 will be the “selfie stick†— a lightweight telescopic stick that connects to an iPhone to enable better selfie shots.
“Other hot gifts include fitness devices like the Fitbit Flex (a wireless wristband that can track sleep, steps, calories etc.), GoPro cameras and games console bundles.
“In electronics retailing, we note the growing trend towards capturing ‘experiences’ through GoPro cameras and selfie sticks. The fitness trend is also gathering momentum through Fitbit activity devices,’’ Mr Woolford said.
According to Citi, JB Hi-Fi has the best “selfie stick density’’ of the major retailers, with the widest range of sticks. It has eight types priced between $29.95 and $99.
“Toys and electronics will be hot product categories in Christmas 2014, based on our industry feedback. Best-selling toys include Disney Frozen-themed dolls and Lego Star Wars, which have sold well in the US and UK.â€
Mr Woolford said successful retailers will be those that get the ingredients of retail right, namely the appropriate depth of product range, the right price point and effective service.
Some retailers will make the “nice list†by getting this mix right, but others look to be missing out.
“Unfortunately, Myer and the discount department stores have a limited range in key categories, or uncompetitive pricing to really win Christmas, in our view. Target is best positioned in toys, but its apparel business is under significant strain.
“Once again, it feels like the ASX-listed retailers will ‘miss out’ on the growth this Christmas.
“Dining out and experiences will take share of wallet. The medium-term outlook for consumer spending is encouraging given lower petrol prices and we prefer Super Retail Group, but remain cautious on all others given downside earnings risks.â€
Mr Woodford warns that Solomon Lew’s Premier Investments is vulnerable given slower clothing sales and escalating promotions. JB Hi-Fi may see better short-term sales trends, but that will be wiped out by weaker gross margins, in Citi’s view.
Tough trading conditions also mean retailers will have to rely more on promotions and discounts.
“Promotions are still the driver for department stores and clothing retailers: clothing has seen an increase in price discounting.
“Before Christmas, 25 per cent — 40 per cent off is widespread, including at some of Premier Investment’s brands.’’