2006 christmas sales in major overseas markets and retail outlook for 2007
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2006 Christmas Sales in Major Overseas Markets and Retail Outlook for 2007. Research Department 28 December 2006. 2006 Christmas Sales in Major Overseas Markets. 1. US – Retailers to Post 4-5% Growth. Basic Positive Factors. Fairly solid expansion helped by last-minute flurry.

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2006 Christmas Sales in Major Overseas Markets and Retail Outlook for 2007

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2006 Christmas Sales in Major Overseas Markets and Retail Outlook for 2007

Research Department

28 December 2006


2006 Christmas Sales in Major Overseas Markets

1


US – Retailers to Post4-5% Growth

Basic Positive Factors

Fairly solid expansion helped by last-minute flurry

  • Low joblessness

  • Steady income growth

  • Respite of oil prices

  • Windfalls from stock market

Other Positive Factors

  • Longer Thanksgiving-to-Christmas

  • A full weekend of last-minute purchases

  • An influx of tourists

2


US – Battlefield between Shoppers and Retailers

  • Prevailing economic slowdown

  • Slackening housing market

  • Still-high fuel costs

  • Selected and procrastinated purchases

Negative Factors

Even more aggressive discounts and promotions

Retailer Strategies

  • Early implementation of promotions

  • Deeper discounts

  • Issuance of gift certificates

3


US – Polarisation of Market

Discounters and mass merchandisers

  • Caution remained the buzzword

  • Sustained popularity of mass merchandisers and discounters

Better performance of value-for-money merchandise

  • Low prices

  • Free delivery

E-tailers

High-end stores

  • Still-strong showing due to continued spending spree of high-income consumers

4


US – Demand Pattern Similar to Last Year’s

Consumer electronics

  • Flat-panel TVs

  • Handheld digital audio players

  • DVD players, digital cameras, mobile phones, notebooks

Consumer electronics remained hot sellers

  • Video game consoles – Wii & PS3

  • TMX Elmo

  • Certain dolls and licensed toys – Barbie, Bratz & Dora the Explorer

  • Educational toys, robots, trucks & cars, children’s MP3 players

Toys

Clothing

  • Sales affected by warm winter

  • High-end apparel

  • Fine jewellery

  • Higher-priced watches

Luxuries

5


Europe – Generally Firmer Festive Spending

Better sales recorded for the major markets amid moderate economic expansion

  • Still-high unemployment

  • Still-high oil prices

  • Higher interest rates

  • Shoppers to buy abroad

Major

Concerns

  • Heavy emphasis on low prices and store promotions

  • Surge in online sales

  • Growing popularity of gift certificates

  • Better sales for luxuries in some markets

Major

Developments

6


Germany – Sales to Increase by 2%

Consumer

electronics

  • Flat-screen TVs, DVD players, digital music players, digital cameras, GPS navigation systems

Spending in advance of a 3-point VAT hike

  • Video games, educational toys, board games, model trains, plush toys, doll sets

Toys

Other gifts

  • Jewellery and watches

Clothing

  • Sales dragged down by mild temperatures

7


France and Italy – Higher Sales Than Last Year Especially in France

Better mood to spend during this holiday season

France

Italy

  • Consumer electronics

  • Video games

  • Jewellery and timepieces

  • Consumer electronics

  • Video games

  • Clothing

8


UK – Sales to Increase 3-4%

Electronic gadgets

  • Flat-panel TVs

  • Digital music players

  • Mobile phones

  • Home cinema products

  • Lap top computers

Low unemployment and firming house prices to support spending

Toys

  • Video games, educational toys, classic toys

Clothing

  • Sales boosted by deep discounts

Other favoured gifts

  • Jewellery and watches

9


Japan – Consumers More Willing to Spend

Confidence spurred by rising winter bonuses and better job prospects

Consumer electronics

  • Flat-screen TVs and digital music players much sought after

Toys

  • Video games a popular buy

Clothing

  • Demand hampered by warm weather

Jewellery and watches

  • Sales facilitated by appetite for luxuries

10


Chinese Mainland – Encouraging Year-end Sales

Retail sales remained strong despite tightening measures

Contributing factors

Favoured gift items

  • Economic fundamentals remained sound

  • Appreciation of RMB

  • Growing popularity of Christmas

  • Increasing Christmas sales promotions

  • Most consumer products including consumer electronics, toys, garments, timepieces and jewellery

11


utlook for 2007

12


US – Consumer Spending to Cool Slightly

  • Sustained consolidation of housing market

Economy to ease back into a lower gear

  • Consumers to remain prudent

  • Sustained popularity of mass merchandisers and discounters

  • But higher-income consumers to continue spending spree

  • Hong Kong exporters to adjust their product strategies

13


EU – Consumption to Remain Stable

  • Rising interest rates

More moderate pace of economic expansion

  • Fiscal deficit reduction

  • Consumers to remain conservative

  • Value-for-money preferred but quality still sought after

  • Strong euro facilitating imports

14


EU – Varied Performances

  • Relatively low joblessness

  • Favourable housing market

UK

Varied prospects for different markets

  • Slowing exports

  • VAT rise for 2007

Germany

  • Slowing exports

  • Deficit reduction measures

Italy

  • Sustained job creation and income growth

France

15


Japan – Consumer Spending to Expand Steadily

  • Moderating exports

Continued but tepid economic revival

  • An end to zero-interest-rate policy and expected tightening of fiscal policy

  • Sustained improvement in labour market and wages

  • Adherence to value-for-money but growing demand for higher-end products

  • Stable yen facilitating imports

16


Chinese Mainland – Healthy Spending to Take Hold

  • Government policies such as introduction of minimum wages, salary reform for civil servants, expansion of rural consumption and increases in welfare expenditure

Increased consumer spending a priority for 2007

  • Rapid urbanisation and growth of middle class

  • CEPA III to provide sales opportunities

  • Shift in consumption on sophisticated consumer goods

  • Increasing mainland customers to shop in Hong Kong

17


Hong Kong’s Exports Expected to Grow 6%in 2007

18


Have a Prosperous 2007!

19


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