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Spectators might be frocked up and in high spirits trackside this Melbourne Cup Carnival, but attendance numbers and overall spending are tipped to be down on last year.

Business information analysts at IBISWorld anticipate Melbourne Cup Carnival spending will decline 6.1% to $268.9 million in 2011, while attendance numbers will be down 1% to just below 350,000.

Tourism will be the biggest loser as less people will travel from interstate or regional areas to be part of the festivities. IBISWorld General Manager (Australia), Ms Karen Dobie, expects a 9.4% drop in tourism spending.

“Beauty will be the next biggest loser with a forecast decline of 8.7%. More racegoers are expected to do their own hair, spray tans and manicures than in previous carnival seasons," Ms Dobie said. “However, we won't go as far as sewing our own dresses. Fashion spending is expected to rise 1.0% on last year to reach $30.3 million."

Betting hasn't been completely overshadowed by the glamour of the track, with Ms Dobie forecasting a 1.6% rise in spending, putting gambling ahead of all other Cup spending.

Spending: Melbourne Cup Carnival

Business information analysts at IBISWorld anticipate Melbourne Cup Carnival spending will decline 6.1% to $268.9 million in 2011, while attendance numbers will be down 1% to just below 350,000.

Tourism will be the biggest loser as less people will travel from interstate or regional areas to be part of the festivities. IBISWorld General Manager (Australia), Ms Karen Dobie, expects a 9.4% drop in tourism spending.

“Beauty will be the next biggest loser with a forecast decline of 8.7%. More racegoers are expected to do their own hair, spray tans and manicures than in previous carnival seasons," Ms Dobie said. “However, we won't go as far as sewing our own dresses. Fashion spending is expected to rise 1.0% on last year to reach $30.3 million."

Betting hasn't been completely overshadowed by the glamour of the track, with Ms Dobie forecasting a 1.6% rise in spending, putting gambling ahead of all other Cup spending.

Spending: Melbourne Cup Carnival

Melbourne Cup Carnival Spending 2010 ($ millions) 2011 ($ millions) Growth (%)
Tourism 183.8 166.5 -9.4
Betting 55.5 56.4 1.6
Fashion 30 30.3 1.0
Beauty 17.2 15.7 -8.7
Total 286.5 268.9 -6.1

Why the dip in spending?

For starters, this year's Melbourne Cup Carnival isn't a landmark anniversary like last year's 150th celebrations. This means it is likely to attract smaller crowds and less corporate and advertising expenditure.

Secondly, compared to overall gambling spending, horse racing expenditure is extremely sensitive to changes in economic conditions. As consumer sentiment has declined this year, a cautious approach to spending on the races is hardly surprising.

“Yet rising spending on fashion indicates that people are still willing to splurge a little on something special," Ms Dobie explained. Spending on luxury goods is also increasing, which shows that the wealthy have not stopped shopping yet.

“Spending is expected to rise on essentials such as dresses, suits and hats, but accessories will suffer as we'll be more inclined to make do with last year's handbag or earrings," said Ms Dobie. “We expect mid-level fashion to do well as racegoers seek value for money."

IBISWorld expects $6.7 million will be spent on dresses and suits (up 1.5% from 2010), $6.18 million on hats and fascinators (up 1.3%), $5.97 million on footwear (up 1.2%), $2.97 million on handbags (down 1%) and $8.48 million on accessories (down 0.2%).

Too tight to travel

The high Australian dollar has encouraged more Australians to head overseas, while also deterring international visitors to Australia. IBISWorld figures show interstate visitor numbers will slump 17% to 48,927, while overseas tourist numbers will decline by 18% to 6,990. Interstate visitors account for 25% of spending at the Spring Carnival, or $67.2 million, while foreign visitors splurge $21.5 million, or 8% of total takings.

Trackside attendance

Over the past five years overall attendance at Melbourne's Spring Racing Carnival has declined 12%, which includes a 1.5% slide in attendance on Melbourne Cup Day itself. This year numbers are expected to fall again, with IBISWorld forecasting a 1% decrease to 349,476 from last year's 353,178, although Derby Day will buck the trend with a 13% increase in numbers. Derby Day will return as the Carnival's most popular race after attendance dipped during last year's 150th anniversary because racegoers preferred to celebrate on Melbourne Cup Day.

Melbourne Spring Racing Carnival Attendance:

Race 2010 2011 Growth (%)
Derby Day 90,361 102,108 13
Melbourne Cup 110,223 100,854 -9
Oaks 75,088 71,334 -5
Stakes 77,506 75,181 -3
Total 353,178 349,476 -1

Source: IBISWorld and Victoria Racing Club Limited: Track Attendance Statistics 1980-2010

Shrinking numbers will have a mixed effect on the hospitality sector. Racegoers may be more inclined to pack a picnic lunch than spend on food and beverages at the track. Corporate spending is also tipped to fall, but Ms Dobie said restaurants could still do well with many racegoers opting to head out for dinner at the end of the day.

Still to come

Australia's horse racing industry continues to face intense rivalry from other forms of gambling, including gaming machines and casinos, as well as the rapid growth of online sports betting. The 30% decline in horse racing attendance in Australia over the last five years, was also identified by Ms Dobie as putting pressure on the industry, making it much more reliant on headline events such as the Spring Racing Carnival to turn a profit.

“This downward spiral is likely to continue for the foreseeable future, as betting on horse and dog races flatlines in the face of high growth in spending on sport and event-based betting, particularly online. The market for online gambling is virtually endless with providers offering odds on everything from politics to polo," said Ms Dobie.

P9311 - Horse and Dog Racing in Australia
X0003 - Tourism in Australia
G5221 - Clothing Retailing in Australia
G5222 - Footwear Retailing in Australia
Q9526 - Hairdressing and Beauty Salons in Australia

For more information on these, or any of Australia's 500 industries, log onto, or to keep up to date with IBISWorld activities follow IBISWorldAU on Twitter or call Ben Taylor on 03 9655 3867.
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Although not great news - love the comprehensive stat's Ben! Thanks! Have a great weekend.
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Brides-to-be buck the slow spending trend

As we launch into spring – the peak season for Australia’s wedding industry – it seems not only loved-up couples, but industry players have something to celebrate, with business information analysts at IBISWorld revealing that couples are forking out an average $36,200 to create their dream weddings, an increase of 6.5% on 2010-11.

“Despite gloomy reports regarding consumer spending in 2011, weddings are still viewed as a high priority expense – which many couples save for over a period of time. So while couples may tighten their budgets in order to save, sensible splurging seems to be the theme for the big day," IBISWorld General Manager (Australia), Ms Karen Dobie said, noting that 119,000 Australian couples are expected to walk down the aisle in 2011, an increase of 0.8% on 2010.

“Other factors influencing the upwards trend in wedding spending include an increase in disposable incomes, financial assistance from parents, and the rising average age of couples walking down the aisle (29 for females, 32 for males) – meaning today’s couples are often in a stronger financial position before marrying.”

Currently worth $4.3 billion, IBISWorld expects Australia’s wedding industry will grow to reach revenue of $4.7 billion by 2016-17, with the biggest beneficiaries being venue hire operators, wedding dress suppliers, food services and photographers.

Wedding spending: Biggest profit pullers

Product/Service % of WE* R**($m) growth***(%)
Venue hire 33.4 1439.7 10.5
Wedding dresses, clothing and accessories 21.9 942.3 6.9
Food services 15.5 668.3 10.6
Photography and film production 11.6 498.3 -2.8
Flowers, stationery and other expenses 17.6 758.3 13.6

*WE = wedding expenditure
**R = revenue generated
***growth = Forecast growth to 2016-17

A venue fit for vows “One of the first tasks for a couple planning their wedding is to find a venue that suits their tastes, wedding size and budget,” Ms Dobie said. “The cost of venue hire usually comprises the largest part of a couple’s budget, and with hotels and exhibition centres – the most popular venues – set to increase their prices, this cost is expected to rise.”

Venue hire currently accounts for 33.4% (over $1.4 billion) of industry revenue, with IBISWorld forecasting growth of 10.5% over the coming five years.

Off-the-rack outfits The increasing number of weddings has led to increased spending on wedding wear – with wedding dresses, clothing and accessories currently accounting for 21.9% (about $942 million) of industry revenue, a figure IBISWorld expects to grow by 6.9% over the next five years.

“Although wedding spending is up, value for money still plays a large role in purchasing decisions. This has seen demand decrease for high-price tailored wedding dresses – which were once considered essential for brides,” Ms Dobie said.

Capturing the day Accounting for 46% of revenue for Australia’s professional photography industry, weddings are not only important to loved-up couples, but to photography professionals as well.

While photography and film production continue to play a central role in weddings, IBISWorld expects overall revenue will decrease by 2.8% over the coming five years.

“Despite photography being labour intensive, industry revenue is expected to drop as both couples and photographers move towards cheaper, digital technologies,” Ms Dobie said.

Other players in the wedding industry that are expected to be affected by the digitisation trend include film production and stationary services – with CDs, DVDs and email replacing the need for hard copies, whether it be for the wedding invitations, photo album or thank you cards.

For more information please call Ben Taylor, IBISWorld on +61 (0)3 9655 3867
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Australia's first physical precious metals exchange to start trading on the 4th of October
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Not all doom and gloom for retailers

Despite the negativity about the retail sector, business information analysts at IBISWorld say that it's not all as bad as it seems, with some Australian retailers cashing in on careful consumers.

Reports have been gloomy regarding the retail sector in 2011, with low retail spending stemming from low consumer sentiment, increased saving, consumers paying down debt and price deflation. The year has been a difficult one, with flat or declining sales for many Australian retailers, as well as job cuts and store closures from major players including Borders, Colorado Group and Premier Retail Group.

Despite these difficulties, IBISWorld General Manager (Australia), Ms Karen Dobie says some retailers are bucking the trend. Harvey Norman, Woolworths, Wesfarmers and JB Hi-fi all reported higher profits in 2010-11. Overall, Australia's retail spending this financial year is expected to be 3% higher than last year at $237.2 billion – or $10,312.50 per person ($26,812 per household).

"While much has been made of store closures, we're also seeing a significant number of new stores opening," Ms Dobie explained. "Spanish retailer Zara has been a resounding success since opening earlier this year; American giant Costco earned $166.4 million from one store in its first year of operation; Bunnings is expanding its store numbers, and Woolworths will make a splash in the hardware market, opening 15 big-box Masters stores within the year."

The retail sector includes bookstores, clothing retailers, hardware stores and supermarkets, with some areas performing better than others.

IBISWorld reports that food and liquor retailers have been particularly strong performers in the past 12 months, with liquor sales rising 2.1% in 2010-11, and overall supermarket sales expected to rise 3% in 2011-12, partly due to higher liquor, fruit and vegetable prices.

Ms Dobie also said hardware retailing has shown improvement, with sales increasing both last year and this year.

"After declining for a number of years, the hardware market enjoyed somewhat of a renaissance during 2010-11, boosted by the popularity of shows such as The Block and The Renovators," Ms Dobie added.

Clothing retailers also performed better in 2010-11, up 1.0%, which might sound minimal but actually reflects a very strong performance, Ms Dobie explained, considering that the average price of clothing has fallen. "The price of men's clothing is down 5%, women's clothing is down 5.7% and kids clothing has dropped by 7.8% over the last year."

The past financial year has played havoc with electrical retailers, with the high Australian dollar causing such a sharp decline in prices that even with higher purchase volumes it has been difficult for retailers to post growth in revenue.

"Price deflation has been a major driver of retail sales in the last year. The price of major household appliances fell by 5.6%, small electrical items fell by 1.6% and audio visual and computer equipment prices dropped by a remarkable 42% last year." While good news for consumers, Ms Dobie said this was particularly challenging since electrical goods retailers typically derive more than half their revenue from audio visual and computer sales.

Turning to department stores, Ms Dobie said sales grew by just 0.3% last year, in yet another bad year for the industry. "While stores have cited online retail competition, new taxes and poor consumer confidence as reasons for their lacklustre performance, this is not a new trend for these players - with revenue rising just 0.3% per year for the past five years, and declining in three out of the last five years."

"Australias savings rate has grown to 13% - its highest level since 1986, indicating many Australians are choosing to pay down debt or put money aside rather than be seduced by the sales. Having said that, spending on luxury goods is up, indicating that the wealthy have not stopped shopping yet."

What's next?
The period from 2003 to 2009 was a golden period for Australian retailers. Australians flocked to shopping centres with spending being funded by easily accessible credit cards, interest free offers and equity from the booming property and share markets. However, 2010-11 marked a return to spending patterns similar to that observed in the 1980s and 1990s. Australians are and will continue to spend but retailers will need to work harder to get customers through their doors and squeeze open wallets.

IBISWorld expects conditions to improve for retailers in the coming 12 months, with growth forecast for all leading retail segments, largely on the back of a steadier Aussie dollar keeping the price of imported goods low.

"We expect the Australian economy to continue to perform relatively well, interest rates are low, unemployment is low and disposable incomes are increasing. This will make Australia an attractive location for international brands, with both Costco and IKEA planning further stores, and UK mega fashion store Topshop opening its first Australian outlet by 2012," said Ms Dobie.
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According to Martin D. Weiss Ph.D. | Monday, October 10, 2011 at 7:30 am

1. Greece will default very soon!
2. The contagion of fear will spread!
3. European megabanks will collapse!
4. European governments will suffer a cascade of new credit rating downgrades!
5. Spain and Italy will be next to face default on their massive debts!
6. Global debt markets will suffer a critical meltdown!
7. The vicious cycle of sovereign debt defaults and bank failures will lead to a global depression!

Is this unnecessary alarmist information or is this an advanced warning?

If so how does this affect your industry and related industries? What are the risks involved with your industries of involvement? What are the best strategies to mitigate the risk?

IBISWorld Provide Industry and Risk Rating reports for Australia, the USA, UK as well as many other economic and global reports.

For more information call Ben Taylor on +61 (0)3 9655 3867
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For World Animal Day (October 4), business information analysts at IBISWorld reveal that despite cautious consumer spending overall, Australians are spending more than ever on vet services, accessories and alternative treatments for their beloved pets.

Australia's pet products and services industry is forecast to generate revenue of $7.88 billion in 2011-12. IBISWorld General Manager (Australia), Ms Karen Dobie, said that there is no slowing the industry as pet owners continue to spend big on their feathered and furry friends.

"About 63% of Australian households – 10 million people – are proud pet owners, with the average household spending $1,460 per year on their pets," Ms Dobie said, identifying pet grooming, boarding, walking and minding services as key contributors to increasing revenue.

"As a nation we are increasingly time poor, resulting in more and more Australians outsourcing elements of pet care," Ms Dobie explained. The proliferation of animal health programs on television and radio has increased consumer awareness of animal health issues and the new age treatments available.

"With more specialised services exposed through the media, more Australians will want to give their pet the best that money can buy to ensure man's best friend – or fish, or budgie – will live a long, healthy and happy life." Ms Dobie said.

IBISWorld: Pet spending
Spending category 2009-10($M) 2010-11 ($M) 2011-12 ($M)
Pet food 2783.2 2812.6 2888.6
Veterinary services 1678.8 1705.8 1776.6
Clipping, training, boarding,
walking and other services 1095.3 1103.0 1140.5
Pet products and accessories 760.5 780.0 810.4
Animals 791.0 795.7 808.5
Surgery 274.6 290.0 299.9
Animal dentistry 27.8 29.0 30.3
Alternative treatments 17.4 18.0 18.9
Other services (burial, cremation,
insurance, micro-chipping) 357.1 362.4 372.2

Purchasing pets

In 2010-11, Australians spent almost $796 million purchasing pets – a figure IBISWorld expects to grow by 1.6% during 2011-12, to reach $808.5 million.

"Although more Australians than ever own a pet, the average number of pets per household has been declining – resulting in slightly slower growth for pet stores," Ms Dobie said. "This is partly due to a surge in inner-city living, with the average Australian home having less outdoor space to keep their pets."

"Cats and dogs still remain the favourites. More than half of Australia's households are home to either a cat or a dog. However, the trend towards medium- and high-density housing has increased purchases of other creatures – those more conducive to inner-city living – such as birds, fish and reptiles," Ms Dobie said.

Going gourmet

Gone are the days of bland, dried biscuits. Pets are now being tempted by everything from fresh vacuum-packed meat to a comprehensive range of foods designed to meet every taste and nutritional requirement.

"Australians spend about $2.8 billion each year on pet food, with more and more pet owners opting for gourmet options," Ms Dobie said, highlighting the increasing number of pet food products available in pet stores and supermarkets.

Furry fashions

"While 2010-11 was categorised by slow men's and women's fashion retailing, there is no slowing the spending when it comes to pets – with owners forking out $780 million last year on the latest pet products and accessories," Ms Dobie said.

In addition to traditional leads and harnesses, products now include diamante collars, pet clothing and kitty handbags. IBISWorld expects spending on pet accessories to increase by 3.8% in 2011-12, to reach $810.4 million.

Health matters

"With pets viewed as valued members of the family, Australians are spending whatever it takes at the vet to keep their pets happy and healthy – to the tune of over $2.1 billion dollars," Ms Dobie said.

"Companion animals currently account for 79% of total veterinary revenue, with surgery, animal dentistry and alternative treatments – such as animal chiropractics and acupuncture – becoming commonplace in addition to traditional treatments and health checks."

To ensure pets are as happy and healthy as possible, many Australians are investing in animal training schools, professional clipping services, dog walkers, day spas and holiday boarding – with IBISWorld expecting over $1.1 billion to be spent on these services in 2011-12.
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With footy fever mounting ahead of the AFL and NRL finals and the start of the Rugby World Cup, Aussie fans are expected to spend over $2 billion over the next eight weeks on football celebrations – with hospitality, tourism and sports betting tipped to be the biggest winners.

Despite consumer sentiment and discretionary spending remaining low, business information analysts at IBISWorld expect that many football fans will throw frugality to the wind, as game tickets, big-screen TVs, alcohol and an obligatory bet or two take precedence over prudence.

IBISWorld General Manager (Australia), Ms Karen Dobie said, "The AFL and NRL finals are milestone events for millions of Australians – and for most supporters, not even tighter economic times will dampen the celebrations. Add the Rugby World Cup into the mix, and the coming eight weeks are certain to be exciting times for both fans and businesses."

"The AFL by far draws the biggest crowds – and earns the most revenue – having already attracted 6.5 million fans to matches during the 2011 season, and with more than 650,000 spectators expected to attend finals matches. By comparison, the 2011 NRL season has drawn just over 3 million spectators, with almost 350,000 expected to attend finals games, and about 30,000 Aussies are expected to attend one or more Rugby World Cup matches."

IBISWorld: 2011 Footy Finals Domestic Spending Forecast
Football Finals Spending in
Australia ($ million) AFL NRL Rugby World Cup Total
Liquor 585.0 372.1 201.8 1158.9
Pubs and bars 287.0 200.1 80.0 567.1
Tourism 64.1 79.5 6.4 150.0
Betting 46.1 31.6 8.9 86.6
Ticket sales 34.0 11.0 2.7 47.7
Appliances 5.0 3.0 0.9 8.9
TOTAL 1021.2 697.3 300.7 2019.2

Pubs, bars and liquor sales:
On average, 20% of revenue from pubs and bars and store-purchased liquor sales occurs during September and October. IBISWorld expects the next eight weeks will generate over $560 million for pubs and bars from sports fans and over $1 billion for liquor retailers (15% higher than the usual monthly takings).

As the football season reaches the finals, more fans flock to the games to support their teams – providing an added boost to domestic tourism. This year, IBISWorld forecasts Australians will spend close to $150 million on domestic travel, with 57% being spent by NRL fans and 43% by AFL fans.

"The wide geographic spread of NRL finalists will see fans fly to attend games over the course of the next few weeks. For the AFL, however, all but two of the finalist teams are Victorian, so the tourism contribution from AFL supporters will be slightly lessened this year as Victoria-based fans enjoy home games," Ms Dobie said.

With the Rugby World Cup starting on September 9, international tourism is also expected to receive a boost, with over 100,000 match tickets being sold in Australia alone and event organisers expecting all Wallabies games to sell out before the beginning of the tournament. "The World Cup will provide a much needed boost to the New Zealand economy through tourism – with Australians expected to be significant contributors," Ms Dobie said.

Sports betting:
"Over a third of the nation's total sports gambling is expected to take place in September and October, with $86.6 million – a staggering 285% increase on average monthly sports betting expenditure – expected to be wagered on the AFL, NRL and Rugby World Cup," said Ms Dobie.

IBISWorld forecasts that during 2011-12, Australians will spend a total $254.6 million betting on sporting events.

Ticket sales
In 2011, IBISWorld expects over 1 million Australians to attend an AFL or NRL final, or a Rugby World Cup match, with fans forking out about $45 million on footy tickets during September and October. "Last year's drawn AFL final netted an extra $16 million in revenue. This year, ticket sales for the finals are expected to be close to the highest in history," Ms Dobie said, noting that after the MCG redevelopment, overall attendance at the finals has grown year on year.

Those Aussies who are unable to make it to a game will often host or attend a footy finals barbecue at home – with big-screen TVs and new BBQs being high on hosts' shopping lists. "During September and October, Australians are expected to spend about $8.9 million on new home appliances – with plasma TVs and grills being the most popular items," Ms Dobie said.

For more information on these, or any of Australia's 500 industries, call Ben Taylor
on 03 9655 3867.
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It seems the world is experiencing some tough economic times. This can polarise opinions on forecasts into two familiar groups "half empties" and "half fulls". Why is there a need to pretend? Let's be realistic, either way its half a glass!

It reminds me of a saying by William Arthur Ward "The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails."

Whilst there’s no point whinging there's also no point burying your head in the economic sand and pretend it's all smooth sailing. The more information that you have in these times the better you will be able to adjust your sails accordingly. Do some research about the industries that you work in and find out what is actually happening and how you can mitigate the risks.

Do your homework and things will be easier in the long run. Understand your situation and the markets by looking at the whole picture, not just the happy sunny side that we are trained to focus on.

There is a lot to learn if you dig below the surface and do some research. This will ultimately allow you to make more informed business decisions.
For more information call Ben Taylor +61 3 9655 3867
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Business Development Manager - IBISWorld
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    Busiess Development Manager, present
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