Australian shoppers plan to cut pre-Christmas spending by almost 20 percent.
The annual Deloitte Retail Holiday Report found consumers were planning to spend just over $1000 on average this year.
Deloitte Consumer Products & Retail Sector Leader Elise Sharpley said the past 12 months had brought little joy for retailers, as inflation, interest rate rises and weak demand weighed on economic growth.
Ms Sharpley said cost of living pressures and the associated belt tightening were driving consumer spending intentions and actions and this was set to continue into the 2024 holiday retail season.
“On the back of real retail turnover per capita not growing since mid-2022, consumers are planning to spend $1,002 on average this year, down 18.9% from 2023,” she said.
Ms Sharpley said the research showed 76 percent of consumers were cutting back on spending overall, but 67 percent were still looking to make small splurges.
She said 48 percent expected to buy fewer goods and services, with 95 percent seeking the best deals as their first priority, while 32 percent said they would walk away without some sort of discount.
“Consumers are changing the way they shop, how much they purchase and the type of products they buy, so we’re looking at a more frugal holiday period ahead.”
From the retailers’ perspective, Ms Sharpley said only 51 percent expected sales growth, down from 57 percent in 2023 and 67 percent in 2022.
She said 40 percent believed consumers wouldn’t pay full price.
However, brighter times may be ahead with 41 percent of retailers anticipating an improvement in consumer confidence over the next 12 months, up from just 10 percent in 2023.
“More than half of retailers expect growth in sales over the next 12 months, and some even anticipate a double-digit rise. The share of retailers anticipating a decline in consumer confidence has also plummeted – from 61 percent to 26 percent – indicating we may currently be at the bottom of the business cycle.”
