It’s not just our waistlines, wallets and wellbeing which will benefit from our New Year’s resolutions in 2011. A number of Australian industries will also reap rewards from our good intentions.
Prior to the economic rollercoaster that was the GFC, Australians spent more money than they earned – financing the difference with debt. The subsequent return of a more cautious mood and a savings rate of around 10% spells more bad news for both retailers and those issuing credit cards.
Paying down personal debts will be a popular resolution this year, and as Australians get increasingly serious about tackling rogue debt run up on the plastic fantastic, credit card issuers will boost their revenue by just 0.9% this financial year to $8.87 billion.
As we become increasingly health conscious and aware of the perils of processed food, manufacturers of organic food are enjoying their moment in the sun. Revenue for the organic farming sector will rise 10.5% in 2010-11 to $445.5 million, as consumers factor in not only the health benefits but the environmental impact of their food choices.
As organic food becomes available in a wider range of stores it’s becoming easier for people to make healthier choices. Both major supermarket players now stock a large range and volume of organic foods, with supermarkets now accounting for more than 60% of total organic sales.
New Year’s resolutions are a major factor for the weight loss industry, which will reel in around 14% ($118.5 million) of its total $789.6 million revenue for the year in January.
While Nestle has recently resolved to purchase Jenny Craig’s Australasian operations, thousands of ordinary Australians will make similar – albeit less costly – investments in the weight loss industry.
Fitness is a favourite buzzword in January too, and the plethora of fitness centres catering for women only is helping attract a clientele which may have previously shunned gyms, while on-site crèches lure the lucrative “mother” market. The addition of yoga, zumba and pilates classes is helping drive memberships for progressive centres.
While this financial year we’ll spend $974.7 million on gym memberships, the figure represents growth of just 0.7% in the past 12 months and while January is a strong month for signing up new members, future growth for the sector is likely to slow down on the back of an increasingly saturated market, with fewer new markets to exploit and tap for growth.
Sitting right alongside the “I will become fit and healthy” resolution is often a plan to quit smoking or cut back on alcohol intake – taking money directly from liquor stores and tobacco sales and putting it into the coffers of supermarkets and pharmacies selling nicotine patches, gum and other aids to kick the habit.
While the value of tobacco sales in Australia in 2010-2011 is estimated to exceed $10 billion, the 25% customs duty increase on tobacco last April – lifting the cost of cigarettes, and the growing awareness of health risks associated with smoking, is expected to see around 80,000 Australians kick the habit in 2011.
The addition of nicotine patches to the pharmaceutical benefits scheme (PBS) from February 2011 – reducing the monthly cost of nicotine patches to eligible recipients from around $160 per month to $5 – will also play a role in prompting many to quit. And with the Federal Government paying the cost difference, patch manufacturers will see an instant increase in revenue.
On the other hand, alcohol sales are not expected to experience any serious drop from the best-laid New Year resolutions – with total spend estimated to exceed $19.6 billion in 2010-2011.
While New Year resolutions may curb the alcohol intake of some Australians, January’s beach and barbeque weather, along with functions scheduled to celebrate Australia Day (26 January), will ensure that liquor retailers will not find their bottom lines unduly affected.
With the summer weather luring people outdoors, DIY projects regularly feature on the list of Australians’ favourite New Year’s resolutions.
While retail spending is showing signs of weakness over the Christmas season, we anticipate a 1.2% improvement in spending on DIY during January 2011 to $67.2 million.
The current modest unemployment rate means many Australians won’t have the time to undertake DIY projects themselves, boosting revenue for handymen and local tradesmen who will be engaged to undertake the work instead.
In 2011, around 5.5 million Australians will volunteer for not-for-profit organisations, ranging from junior sports, to religious groups and community organisations. Other philanthropic gestures bound to feature on the resolution list include child sponsorship and planned giving programs.
Australia’s charities and not-for-profit organisations will generate $9.65 billion via fundraising and donations in 2010-11, with an estimated 5.1% ($492 million) given in January.
Around 1.8 million Australians will enrol in a course from the technical and further education sector in 2010-11, with those aged between 25 and 64 accounting for more than half of the total enrolment numbers.
It’s expected enrolments will dip by 0.6% this financial year, partly attributable to the modest 5.2% unemployment rate, since the trend to enrol in further education spikes when jobs are difficult to find.
Higher interest rates may dampen demand for personal interest courses, such as learning a new language, however those appealing to families or groups, such as cooking classes, may enjoy growth during January as people seek out school holiday activities to promote learning alongside leisure.
In coming years it’s expected the range and number of short courses available to rise as education providers engage market research to determine areas of interest, and market their course offerings more aggressively.
Thanks to the powerful Australian dollar, and the ongoing trend of discounting wars between airlines and hotels, 2011 will be the year many Australians opt to take their holiday break abroad.
The current exchange rate represents a more compelling reason to holiday overseas than we’ve seen for many years, with flight routes to Southeast Asia and the US particularly hotly contested by airlines right now.
As a result, the international airlines industry will increase its revenue by 10.8% to $13.96 billion in 2010-11, while domestic airlines will enjoy a 4.4% increase in revenue to $12.25 billion – a welcome increase after two declining years on the back of poor consumer confidence, falling fuel costs, and strong competition from the international airlines sector.
Paradoxically, the recent promotional visit by American talk show host Oprah Winfrey may boost Australia’s domestic tourism industry in a more immediate manner than recent campaigns by Tourism Australia, with both local and foreign tourists exposed to a variety of Australian destinations via the mass media coverage – with much more to come.
Robert Bryant is the general manager of business information firm IBISWorld. For more on this sector, head here.
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
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