Nearly one in two Australians have made plans to shop at the Boxing Day sales, with one of the big four banks predicting around $4.6 billion (US$3.1 billion) to be spent on post-Christmas stock.
That’s according to the Commonwealth Bank of Australia (CBA), which said that the cost of living pressures were driving a significant change in Australians’ shopping behaviour.
CBA Chief Economist Stephen Halmarick said an increase in spending at discount and variety stores during November is partly explained by Christmas and holiday shopping, with discretionary spending up 1.9 percent.
“However, people are also using the sales to stock up on essentials, with essential spending edging up 0.3 percent,” Mr. Halmarick said, adding that essential spending usually occurs after the gift-giving period.
“However, given consumers are clearly seeking sales bargains for both essential and discretionary items, Boxing Day sales could also see a similar trend with a larger share of essential spending.”
While more people are planning to shop during the Boxing Day sales than in previous years, Australians are planning to spend less, the bank said.
The average planned spend this year is $475.70, which totals $4.6 billion across Boxing Day sales nationally. This compares to a planned average spend of $483.20 in 2022 and $557.05 in 2021.
“Aussie household budgets are being squeezed on multiple fronts, so it is not surprising that individual shoppers are tightening their belts,” Ms. Irvine said.
“While most economists do not expect the Reserve Bank to raise interest rates much further, the cumulative effect of rising costs so far is being felt.”
Interestingly, males aged 30-39 and living with children are predicted to “spend big”—over $500 at the check-out.
Gen X will spend the most on gifts ($408), while millennials take the lead on eating out ($179), and Baby Boomers spend the most on alcohol ($524).
How to be Cost Savvy This Christmas
According to Ms. Irvine, a good rule of thumb is that if it’s the first time you would purchase something during a sale period, you probably don’t need it.“For anyone planning to use Boxing Day as an opportunity to bag a bargain, it is important to have a clear plan in advance of which items you plan to purchase. Write a list and stick to it to limit impulse purchases,” she said.
“If you are stocking up, make sure to do your research and check first for any cashback offers that may be available for that retailer.”
- Shop during the sales period
- Set a budget ahead of time
- Online shopping can be cheaper for first-time customers
- Open a Christmas savings account
- Don’t say “yes” to every sale
Australians to Splash $9 Billion in Pre-Christmas Sales
Meanwhile, retailers are predicted to rein in $9 billion in pre-Christmas sales.Additionally, food spending is forecast to encompass the majority of spending, making up $27 billion of the overall spend—up 3.2 percent from 2022.
While household goods sales are predicted to fall by 3 percent and hospitality sales by 1.5 percent.
Department stores are projected to lead spending growth (up 3 percent), followed by other retailing, which includes recreational goods, books, cosmetics (up 1.6 percent), and clothing (up 0.6 percent).
South Australia is set to record the biggest growth in sales, up 2.6 percent from last year, followed by ACT (2.0 percent), Western Australia (1.6 percent), Northern Territory (1.2 percent), Victoria (1.2 percent), Tasmania (0.9 percent), and New South Wales (0.7 percent).
Customers in New South Wales are forecast to spend $21.3 billion, with Victorians to spend $17.3 billion.
ARA CEO Paul Zahra said retailers had built momentum during the Black Friday sales despite the cost of living pressures.
“November trading by all accounts appears to have been strong, despite cost-of-living pressures, as shoppers capitalised on unprecedented deals and sales to tick off their Christmas lists early, and this has helped prop up our Pre-Christmas projections somewhat,” Mr. Zahra said.
“With that said, we’re still anticipating overall a subdued Christmas—with most Australian households now turning their attention to Christmas day and finalising their fresh food choices with seafood being at the top of the list.
“The slight increase in spending this year is being inflated by unavoidable supply chain price increases, particularly in food, and an overall increase in Australia’s population.
“If you exclude these factors, overall Christmas spending is in decline.”
Mr. Zahra added that discretionary retailers make up to two-thirds of their profit during the Christmas trading period.
“This holiday period can be a make-or-break for many discretionary retailers,” Mr. Zahra said.
