Tablets the charm for JB Hi-Fi this Christmas as sale spending hits $14.5 billion

Christmas shoppers flocked to electronics this December, with tablets a hot item.

According to retail spending estimates released yesterday by Citi, most retailers will post increased sales of 3% to 4% on their 2012 results. This was a better increase than in recent years, the report said, “but by no means a boom”.

Electronics retailers did well. JB Hi-Fi was a particular standout. However, many fashion retailers succumbed to discounting, meaning they are unlikely to post large profits over the Christmas period, the report states.

“Because of their strength in portable electronics, we think that JB Hi-Fi was very well placed over Christmas, and feedback supports that, more so than other retailers like Harvey Norman,” Citi analyst and author of the report Craig Woolford told the ABC’s PM program.

“Tablets remain the strong category, having had very strong growth in 2013. We’ve seen growth away from Apple towards Android tablets, which are lower-priced.”

Another strong category in the Christmas lead-up was sporting goods, which likely benefitted companies like Super Retail Group, which owns Rebel Sport and Amart All Sports. Citi estimates its sales increased 7% over the Christmas quarter.

But fashion retailers were forced to rely on promotions to drive sales, with womenswear and footwear having a particularly tough time of it. Some retailers, concerned about overly high inventory levels in the lead-up to Christmas, began discounting weeks before December 25.

Premier Investments – owner of brands like Just Jeans, Portmans and Peter Alexander – and Specialty Fashion Group – which specialises in women’s apparel with brands like Millers and Katies – were probably worst affected, the report states.

Among the department stores, David Jones likely did better than Myer, Citi’s report estimates, because it has more stores in New South Wales and Western Australia, where sales trends were notably stronger than the national average.

Woolford said the post-Christmas sales were reasonably strong, but interest in such sales has been fading rapidly in recent years. This posts a particular challenge for clothing retailers, who may be forced to move into their winter season in the middle of January.

The Australian Retailers Association predicts spending in the post-Christmas period saw $14.6 billion of goods sold – a 3.8% increase on last year.

Electronics sales are tipped to remain strong throughout the year. According to a Gartner report published this week, Australian consumers and businesses are set to spend $76.9 billion on IT in 2014, an increase of 2.54% on 2013.


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