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Father’s Day spend tipped to soar

 

shoppingA strong economy, the healthiest consumer sentiment in three years, and continuing high incomes are expected to fuel spending this Father’s Day, according to a new IbisWorld Australia study.

IbisWorld anticipates that Australians will spend $754.million this Father’s Day, a three per cent increase on 2013.

The average spend on dad  in the lead up to Father’s Day is expected to reach $51.60, up from an average of $50.70 in 2013, however, Dad still gets a bad deal compared with Mum, with spending on Mother’s Day almost double what we spend on dad.

“While spending on Mum is significantly higher than spending on Dad, the gap is closing,” said Daniel Ruthven, GM, IbisWorld.

“There has been a perceived lack of gift options for fathers, but there is evidence that Australian dads are becoming increasingly comfortable with personal-care gifts from aftershave balm to hand moisturiser, rather than the standard gift of socks and ties.

Ruthven tipped personal care products to lead the charge with growth of 12.7 per cent. This is followed by footwear, clothing and accessories, forecast to grow by 5.6 per cent, and the stalwart tools, hardware and electronics category, growing by 4.4 per cent to reach an estimated $154.8 million and making up more than 20 per cent of all spending this Father’s Day.

Face cream, balms, ointments, and other lotions and potions are expected to make an appearance this Father’s Day as spending on personal care products reaches double digit growth to top $35.0 million.

“Male grooming products have become increasingly popular, as dads become more comfortable looking after their appearance. Cosmetic and grooming product manufacturers are working hard to penetrate the previously untapped, but sizeable, male market. Many of these gifts have broad pricepoint appeal, meaning sons and daughters in all income brackets can afford to lavish their fathers with something from around $5 to well over $500,” said Ruthven.

Footwear, clothing, and accessories are forecast to post strong growth to $66.4 million this Father’s Day, with many dads now preferring fine Italian leather over a pair of inexpensive synthetic brogues. Similarly, practical accessories, such as scarves, hats, gloves, and wallets, are also showing signs of premiumisation, with wool, cashmere and animal skins showing strong growth at the expense of cheaper, synthetic alternatives.

The category most synonymous with Father’s Day – tools, hardware and electronics – is expected to post healthy growth in 2014 as the range of products combines with heavy discounting to entice doting offspring to the DIY or electrical store.

ibisworld

“Despite increasing use of personal care products, dad is unlikely to relinquish his DIY passion. Dad’s love of DIY means this category will continue to perform well in the lead up to Father’s Day in a competitive and increasingly crowded market. Electrical retailers are also hoping for a bumper period, as increasingly sophisticated technology appeals to many fathers’ enthusiasm for tech gadgets,” added Ruthven.

The sporting goods category is another recipient of Father’s Day dollars, benefiting to the tune of nearly $60 million.

Many families opt to dine out on or around Father’s Dad, with dining out with Dad is anticipated to generate almost $177 million.

As the diversity of Father’s Day gift purchasing increases, gift cards, and vouchers are expected to fall in popularity, declining by 2.8 per cent to $73.0 million.

Sustained growth in online retailing over the past year suggests that generous children are increasingly turning to online retailing, especially those retailers that gear themselves towards Father’s Day. Online retailers are increasingly offering free or heavily discounted delivery options and favourable returns policies, both of which are supported by increased convenience, accessibility and price transparency.

“Consumers are able to check product prices at bricks-and-mortar outlets and compare them with prices online, and this has been made even easier due to the prevalence of smartphones and price comparison websites. Overall, online retail sales are forecast to grow by 13.3 per cent over the past year. IbisWorld anticipates this growth to continue, albeit at a less vigorous pace, as established retailers with a physical presence fight to remain profitable.”

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