Australia might be in for another “penny-pinching Christmas” in 2023, Westpac senior economist Matthew Hassan said after the bank found the vast majority of shoppers will hunt for bargains this festive season.
The average Aussie is planning to spend a total of $836 this Christmas, with millennials leading the pack with a planned spend of $948.
It comes as consumers appear deeply pessimistic following last week’s RBA rate hike.
The central bank’s board chose to lift the cash rate – a major influencer of interest rates – 25 basis points to a 12-year high of 4.35% in its November meeting.
About 1,200 Australians were surveyed in the week of 6 November for the Westpac-Melbourne Institute Consumer Sentiment Index, with initial results revealing consumer sentiment had risen slightly month-on-month.
However, all that turned around in the wake of the RBA’s decision – consumer sentiment fell 6% following the RBA’s move.
On top of that, the majority of respondents now expect rates to increase further in the coming months.
Mr Hassan dubbed the weak sentiment print “an ominous sign heading into the Christmas high season”.
“Pessimism is having a major bearing on spending attitudes,” he said.
“The RBA’s November rate hike has put renewed pressure on family finances and reignited concerns about both the rising cost of living and the prospect of further rate rises to come.”
Meanwhile, new data released today reveals wages rose 1.3% in the September quarter and 4.0% over the 12 months prior – outpacing inflation for the quarter (up 1.2%) but not for the year (up 5.4%).
However more budget-conscious shoppers plan to reach for their wallets during Black Friday and Cyber Monday sale events later this month.
Australians are expected to spend $10.8 billion over the course of the sale events, running from 24 November to 27 November, with the United States' post-Thanksgiving tradition bleeding into domestic retail.
That’s according to ING research, surveying 1,016 shoppers late last month.
The banking giant found 53% of Australians plan to take advantage of Black Friday and Cyber Monday discounts in 2023 – a 5% year-on-year increase.
Of those, nearly half are gearing up to shop for Christmas presents, while close to a quarter will be hunting for essential household items and 16% will be aiming to replace broken items.
“As we head into the giving season, Aussies are looking for the best deal they can in the Black Friday and Cyber Monday sales, and it’s great to see so many planning in advance and doing their research,” ING Australia head of daily banking Matt Bowen said.
“But it's also important to stay vigilant to common scams that could turn savings into nightmares. Especially as many scammers look to capitalise on Aussies hunting for a good deal.”
Shoppers warned to be wary of scams this holiday season
ING estimates 1.4 million Australians have previously been scammed during the Black Friday and Cyber Monday sales.
Aussies have lost an average of $1,023 on holiday shopping scams in the past, according to leading cyber safety company Norton.
Major concerns for shoppers this year include the safety of their personal details and AI-powered shopping scams, Norton’s 2023 Cyber Safety Insights Report found.
Mr Bowen outlined five tips to help shoppers avoid scams this holiday season:
- Be wary of clicking links shared on social media, emails, or through text
If you’re unsure, verify if a deal is legitimate by checking the company’s official website
- Always check if an email address is legitimate
Sophisticated scammers can sometimes create fake company email addresses that appear genuine – always check the domain name and, if in doubt, contact the business through a trusted channel.
- Be alert for websites posing as ‘discount’ website for a reputable retailer
- Do you research on common scams and tactics
- Remember, if a deal sounds too good to be true, it probably is
Image by Paige Cody on Unsplash.