- Three quarters of Australians are planning to spend less on Christmas this year, an increase from one in four in 2022
- It comes as the cost-of-living crisis puts pressure on many consumers
- Retail trade climbed 0.9% in September ahead of next month's Black Friday and Cyber Monday sale events
- Surprisingly strong sales have solidified some expectations that the RBA board will hike the cash rate when it meets next week
The cost-of-living crisis is leaving the majority of Australians concerned about the upcoming holiday period, new research from PayPal reveals.
Three-quarters plan to spend less during the festive season this year, up from 40% in 2022.
According to 1,000 Australians surveyed, the rising cost of groceries is the largest worry felt by festive punters, with 63% concerned.
Higher fuel costs and rising energy and utility bills are a concern for more than half of Australians, while 20% state the looming Christmas season has them worried about their financial situation.
But shoppers don’t appear to be waiting for the festivities to begin to increase their spending.
The latest retail trade figures, released by the Australian Bureau of Statistics (ABS) yesterday, saw Australian spending increase 0.9% month-on-month to $35.87 billion in September.
That was driven by increased turnover at department stores, clothing retailers, and on household goods.
The latter was partly driven by the release of the latest iPhone model and Queensland’s Climate Smart Energy Savers Rebate program.
Retail trade was the last of three major data points to be considered by the RBA board at its November meeting, as well as the third to suggest a cash rate hike may be on the cards.
Validating concerns revealed by PayPal, the cost of fuel was one of the biggest drivers of inflation in the three months to September, rising 7.2%.
Meanwhile, electricity costs jumped 14.5% over the 12 months to the September quarter and the price of food and non-alcoholic beverages increased 4.8%, ABS data found.
Historically, the RBA board has increased the cash rate more often in November than in any other month, with 14% of November meetings since 1990 having resulted in a change.
That might be largely due to the September quarter’s consumer price index (CPI) data, released in late October, and the upcoming holiday period, which could otherwise be a driver of inflation.
Experts at all four of the big banks now expect the cash rate will be hiked at next month’s meeting.
However, despite the cost of festivities being rated as one of the worst things about the holiday – just behind crowded stores – almost half of those surveyed believe you can have a great Christmas if you spend wisely.
How to cut back on spending this holiday season
There are plenty of ways to reduce the financial aches and pains of the holiday season, according to PayPal.
For instance, online shopping allows for easier comparison of prices and seeking out coupons, loyalty discounts, or other offers can help ease the financial strain.
More than eight in 10 are planning to buy gifts online this year, perhaps making the most of the upcoming Black Friday and Cyber Monday shopping weekend.
The sale events, signifying the weekend after the United States’ Thanksgiving holiday, will take place between 24 November and 27 November.
Last year, Black Friday sales drove monthly retail turnover to a then-record high as the sale events’ popularity climbed.
Image by Chad Madden on Unsplash.