Interest rates, inflation: Australian Christmas shopping to change under financial pressure
Australians are reducing their purchases of luxury items and looking for bargains as they battle rising inflation, but many still plan to spend big on Christmas, new data shows.
Nearly half of shoppers surveyed feel confident about pre-Christmas sales, and one in five expect to spend more in the past year, according to the National Retail Association study.
The Consumer Sentiment report, which was prepared with the Retail Doctor group, found that 71% of consumers had changed their spending behavior due to inflation.
Buying decisions at big events – which are still led by Boxing Day but also include Black Friday and Cyber Monday sales before Christmas – should be driven by available discounts and offers.
According to the report, nearly half of respondents have switched to cheaper brands to combat rising inflation.
“Consumers are feeling the effects of continuously rising interest rates and are keenly aware of the impact of these inflationary pressures on their hip pocket,” the report said.
“This is driving a significant shift in consumer spending habits, with consumers reporting they switched brands more in 2022 than at any time since the start of the pandemic.”
The report also found that over the next six months, 66% of people would reduce non-essential spending, 62% would seek more sales and discounts, and 60% would reduce visits to restaurants and takeout.
Only 2% said they would change their spending habits little or not at all.
NRA acting chief executive Lindsay Carroll said overall the data showed Australians were willing to cut back on day-to-day spending to splurge on special events such as Christmas.
“This follows trends we’ve seen in previous years where interest rates and costs were rising,” Ms. Carroll said.
“People always want to feel special and have these beautiful experiences.
“But rather than having regular dining experiences or spending that extra bit on groceries or more expensive products, they look for sales and specials and save their splurges for special occasions.”
The report also found that people still preferred to do their festive shopping in-store, even as online sales increased, while free delivery was a key driver, followed by loyalty programs and free returns.
Poor customer service remains the biggest barrier to customer retention, the report notes.
“There are still customers ready to spend the holiday season, but more than ever they are looking for great deals, great shopping experiences and smooth transactions,” Ms. Carroll said. .
“The challenge for business owners and their staff is greater than ever to have the right products, the best service and competitive prices.
“Those who master these factors can expect a very good Christmas season.”