Australians set to spend more for Christmas, report finds
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Despite the economic pressures of inflation, interest rate hikes, and the rising cost of living, Australians are gearing up to spend more on Christmas presents this year.
This surprising trend was revealed in the Christmas Retail Trends Report, conducted by Monash Business School's Australian Consumer and Retail Studies.
The report surveyed 1,014 shoppers across Australia and found that consumers plan to spend 16 per cent more on clothing, footwear, and accessories compared to last year.
Electronics purchases are expected to skyrocket by 40 per cent, while spending on household goods is set to increase by 16 per cent.
When it comes to budgeting for the festive season, respondents indicated they planned to spend about $427 on immediate family, $246 for extended family, $149 for friends, and an indulgent $266 for themselves.
Dr Eloise Zoppos, the Lead Researcher, attributed this increased spending to inflation and supply chain price rises in the aftermath of the COVID-19 pandemic.
'We've consistently found over the past few years since COVID that people have told us they're spending more and more each Christmas on gifts,' Dr Zoppos shared.
According to data from comparison website Finder, the average Australian is expected to shell out $1,479 for the 2023 holiday season, with $373 put towards presents.
The easing of restrictions and larger gatherings could also be contributing factors. As people reconnect with family and friends, they will likely spend more on gifts. However, the effects of inflation cannot be ignored.
‘So our results are likely a mix of people seeing more people, and spending more money on gifts for family and friends, and also some inflation element where people [perceive] the cost of products [is] more than they have been previously,’ Dr Zoppos explained.
Paul Harrison, a Consumer Behaviour expert from Deakin University, isn't surprised by these figures. He believes observing rituals and meeting expectations associated with events like Christmas are deeply ingrained in human nature.
'It's a way of escape as well, a way of treating yourself and being kind and good to the people you care about,' he said.
Harrison also pointed out that the data aligned with holiday season consumer spending seen during recessions. He explained that it's difficult to resist spending money at Christmas, as people get swept up 'in this ritual buying frenzy'.
‘I think to resist that urge, even during a cost of living crisis, means that you are pushing back against all the expectations of everybody around you,’ he stated. ‘So it actually becomes easier to consume and buy things at Christmas time than it is to resist.’
However, Retail Expert Gary Mortimer expressed scepticism about some of the report's projections, calling them 'overly optimistic'.
‘Ultimately, nobody is going to cancel Christmas, but it'll certainly be more subdued, and consumers will be more frugal in their approaches,’ he expressed.
Mr Mortimer added: ‘I think while retailers would certainly welcome an increase in sales this Christmas, I don't think objectively that number is going to be realised in those areas based on the data.’
Planning for a Frugal Christmas
While the festive season is a time for generosity and indulgence, planning to avoid financial stress is essential. Here are some tips to help you manage your Christmas spending:
What are your thoughts on this year's Christmas spending trends? Have you set a budget for your festive shopping? Share your thoughts and tips in the comments below.
This surprising trend was revealed in the Christmas Retail Trends Report, conducted by Monash Business School's Australian Consumer and Retail Studies.
The report surveyed 1,014 shoppers across Australia and found that consumers plan to spend 16 per cent more on clothing, footwear, and accessories compared to last year.
Electronics purchases are expected to skyrocket by 40 per cent, while spending on household goods is set to increase by 16 per cent.
The Christmas Retail Trends Report claimed consumers plan to spend more on Christmas presents this year. Credit: Tofros.com/Pexels
When it comes to budgeting for the festive season, respondents indicated they planned to spend about $427 on immediate family, $246 for extended family, $149 for friends, and an indulgent $266 for themselves.
Dr Eloise Zoppos, the Lead Researcher, attributed this increased spending to inflation and supply chain price rises in the aftermath of the COVID-19 pandemic.
'We've consistently found over the past few years since COVID that people have told us they're spending more and more each Christmas on gifts,' Dr Zoppos shared.
According to data from comparison website Finder, the average Australian is expected to shell out $1,479 for the 2023 holiday season, with $373 put towards presents.
The easing of restrictions and larger gatherings could also be contributing factors. As people reconnect with family and friends, they will likely spend more on gifts. However, the effects of inflation cannot be ignored.
‘So our results are likely a mix of people seeing more people, and spending more money on gifts for family and friends, and also some inflation element where people [perceive] the cost of products [is] more than they have been previously,’ Dr Zoppos explained.
Paul Harrison, a Consumer Behaviour expert from Deakin University, isn't surprised by these figures. He believes observing rituals and meeting expectations associated with events like Christmas are deeply ingrained in human nature.
'It's a way of escape as well, a way of treating yourself and being kind and good to the people you care about,' he said.
Harrison also pointed out that the data aligned with holiday season consumer spending seen during recessions. He explained that it's difficult to resist spending money at Christmas, as people get swept up 'in this ritual buying frenzy'.
‘I think to resist that urge, even during a cost of living crisis, means that you are pushing back against all the expectations of everybody around you,’ he stated. ‘So it actually becomes easier to consume and buy things at Christmas time than it is to resist.’
However, Retail Expert Gary Mortimer expressed scepticism about some of the report's projections, calling them 'overly optimistic'.
‘Ultimately, nobody is going to cancel Christmas, but it'll certainly be more subdued, and consumers will be more frugal in their approaches,’ he expressed.
Mr Mortimer added: ‘I think while retailers would certainly welcome an increase in sales this Christmas, I don't think objectively that number is going to be realised in those areas based on the data.’
Planning for a Frugal Christmas
While the festive season is a time for generosity and indulgence, planning to avoid financial stress is essential. Here are some tips to help you manage your Christmas spending:
- Set a budget: Determine how much you can spend on gifts, decorations, and festive meals without straining your finances.
- Make a list: Write down everyone you plan to buy gifts for and allocate a portion of your budget to each person.
- Start early: Starting your Christmas shopping can help you spread the cost over several months and take advantage of sales and discounts.
- DIY gifts: Consider making homemade gifts. They can be more personal and cost-effective.
- Avoid using credit: If possible, avoid buying gifts on credit to prevent starting the new year with debt.
What are your thoughts on this year's Christmas spending trends? Have you set a budget for your festive shopping? Share your thoughts and tips in the comments below.
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with that and there is no pressure to buy overpriced items.
