Shoppers are expected to make the most of the Boxing Day sales this year as rising living expenses continue to weigh on household budgets.
Australian Retailers Association (ARA) and Roy Morgan analysis anticipates an almost eight percent rise in post-Christmas spending compared to this time last year.
Spending is expected to reach a record $23.5 billion (US$15.7 billion) and attract more digital traffic than Black Friday sales in November.
While spending on clothing and in department stores is expected to pick up, the post-Boxing Day surge is expected to be led by hospitality venues as the Omicron wave kept expenditure across the category depressed in late-2021.
ARA CEO Paul Zahra said Australia was still enjoying an elevated period of post-pandemic spending as a reward for getting through challenging times.
“The rush to get out and indulge the senses – eat drink and be merry – remains a constant through this holiday period as Australians recover their post-pandemic mojo,” Zahra said.
Zahra said shoppers tended to wait for Boxing Day discounting to spend on themselves, whereas pre-Christmas spending was usually reserved for gifts.
While heartened by the strong forecasts, he said inflation and unseasonal weather was likely skewing the predictions upwards.
Finder data also revealed a strong appetite for Boxing Day spending, with one in three people planning to shop when the discounting kicks in.
Finder shopping expert Chris Jager said some retailers started their sales before Dec. 26.
“This means you can shop now and spend the public holiday relaxing,” Jager said.
But there is evidence shoppers are reining things in, with ANZ customer data revealing late November-early December spending that is relatively weak when inflation is taken into account.
While spending was 10 percent higher than over the same period in 2019, the consumer price index has lifted 10.5 percent in that time and the population has grown by almost 2 percent.
ANZ senior economist Adelaide Timbrell said post-pandemic recovery spending was wearing off and budget challenges were starting to bite.
“The transition from pent-up demand post COVID to a rate and inflation-led household budget squeeze will intensify in 2023 as fixed rates roll off.”
