Father’s Day tipped to bolster hardware sales

Father’s Day spending will grow by 1.72% this year, according to research firm IBISWorld, with hardware and electrical retailers tipped to experience the largest percentage of spending growth.

According to Karen Dobie, IBISWorld general manager for Australia, total spending will hit $647.6 million this Father’s Day – an increase of 1.72% compared to total spending in 2010.

“While last year’s mood was buoyant, this year our cautious approach is being exacerbated by continuing bad news in the global markets,” Dobie says.

“This year expensive gifts will be swapped for dining out and online bargains, as saving and paying down debt remains our top priority.”

Rather than waking up to a pile of presents, IBISWorld expects many fathers will receive a handmade card and the promise of a meal out.

“When times are good, we tend to buy a gift for dad and treat him to a meal out as well. This year, buyers are expected to choose one or the other, with eating out likely to come out on top,” Dobie says.

Cafes and restaurants are expected to be the top earners from Father’s Day, with spending forecast to reach $157 million, up 1.86% on last year.

Hardware and electrical retailers are also expected to do well relatively well, with spending tipped to rise by 4.71% to $141.8 million.

However, both Dobie and IBISWorld industry analyst Paul McMillan say the surge in spending will be driven by gift cards rather than big-ticket items.

“Hardware store gift cards are likely to be a winner here, with the gift card category now accounting for around 10% of total Father’s Day spending,” Dobie says.

Liquor stores will also experience an increase in activity, with spending tipped to rise by 2.71%, from $31.6 million in 2010 to $32.5 million in 2011.

“A bottle of scotch is always going to be a winner,” McMillan says.

Gift card spending will grow by 1.54% to $64.4 million, while personal care spending will rise 1.47% to $29.7 million.

Meanwhile, spending on sporting goods and apparel will increase from $60.8 million last year to $61.4 million this year – an increase of 1.04%.

But not all retailers will be happy – spending on clothing is expected to fall 5.6% to $65.4 million while spending on books and CDs will slump 5.81% to 30.2 million.

Overall, IBISWorld predicts Australians will spend an average of $28.10 on Father’s Day presents in 2011 – about 13% less than they spent on Mother’s Day gifts ($32.40).

According to IBISWorld, one reason for this could be the difference in price for traditional gifts – with “Mum’s perfume typically costing more than a meal out for Dad”.

McMillan says small businesses need to promote their products as having value for money by make consumers feel as if they’re “purchasing something that is less [than usual] but will still be appreciated”.