It’s expected to be a flat Christmas as spending is only expected to rise 3.3 per cent from last year, with the average shopper spending $1,213.22 over December to total $27.4 billion, according to IBISWorld.

About 34 per cent of Australians intend to spend less than they did last year and fewer than 20 per cent are planning to spend more.

IBISWorld general manager Karen Dobie said the reason for this is shoppers are becoming savvier.

“In 2011, Australian shoppers have been savvy, seeking out the best value for money, the best range and the best service. This trend is anticipated to continue through Christmas,” she said.

IBISWorld found that clothing and footwear will be the biggest losers this festive season, with an anticipated meagre 2 per cent rise. Men’s clothing retailers may be the only winners among clothing and footwear retailers, as style and image consciousness continue to be important for many men.

Food retailers will also see a timid 3.4 per cent spending increase this Christmas. However, after a lacklustre year caterers, venue hire operators and restaurants will be boosted by corporate Christmas spending.

According to Dobie, when sales and profits are weak, it is extremely difficult for firms to justify additional expenditure to shareholders. Therefore spending on corporate gifts will be flat this year, with higher volumes to be offset by lower prices on many gifts due to the soaring Aussie dollar.
“Overall, we expect Australian businesses to spend $491 million on Christmas gifts and parties for staff and clients – up a healthy 9.2% on last year but well below the $684 million splashed out in 2007,” she said.