The retail sector is expected to face tougher competition in 2011, especially in NSW as consumers shop around for the best deal, according to IbisWorld in its latest report.

The ‘Industries to Fly and Fall in 2011’ report expects electricity distribution to be one of the top five growing industries this year.

Although stronger economic activity this financial year is leading to higher demand for electricity, revenue will be pushed up by higher retail electricity prices, with IbisWorld anticipating growth of 9.3 per cent for 2011.

However, stronger competition for retail customers and higher input prices will mean electricity retailers’ profit margins will decline in 2011, the report said.

The steady demand for organic products in Australia over the last five years, as consumers increasingly factor in the health benefits and environmental impact of their food choice has also put organic farming in the top five growth list.

“Strong growth has also been supported by major retailers – such as Coles, Woolworths and McDonald’s – promoting their organic lines; 5.3 per cent of industry revenue comes from supermarkets, compared with 11.4 per cent from farmers’ markets, and 10.2 per cent from specialist organic retailers,” IbisWorld said.

Making the growing list are also video games, motor cycle dealing and domestic airlines industries.

On the other, telecommunications resellers are in the top five declining industries list.

Operators such as iiNet and TPG have purchased the rights to use existing infrastructure in large quantities at heavily discounted prices, giving them the ability to undercut the major players at the retail end including heavyweights Telstra, Optus and Vodafone.

Meanwhile, wired telecommunications carriers, apple and pear growing, recorded media manufacturing and publishing and professional photography are also on the decline