Aussies 'are being more conservative with their spending'
Retailers have been encouraged by Aussies' more relaxed attitude towards spending in recent months, but unfortunately it seems a lot of people are starting to tighten their belts again.
A new report published by Commonwealth Bank (CBA) has shown that many households kept their credit and debit cards under lock and key in October.
Overall spending was down by 1.2 per cent during the month in seasonally adjusted terms, which is a huge blow to struggling merchants.
The bank's Business Sales Indicator is put together by monitoring the value of card transactions through CBA's point-of-sale terminals, which is said to represent around 30 per cent of the Australian market.
Chief economist at CommSec – the bank's broking subsidiary – Craig James believes people are still spending, but are doing so "very selectively".
"Interestingly, the last interest rate cut in October doesn't appear to have boosted spending to the same extent as similar moves in May and June," he remarked.
"An improvement in the global financial environment will prove vital in lifting consumer sentiment and spending in the lead up to Christmas."
The study indicated that vehicle sales were up by 0.7 per cent during the month, while the demand for amusement and entertainment products/services increased by 0.5 per cent.
On the other end of the scale, service providers reported a 4.6 per cent drop in sales and mail/telephone order providers also saw their trade decline by 4.1 per cent.
Although the figures make for bleak reading at first glance, CBA's executive general manager of local business banking Adam Bennett suggested that spending levels are still around 6.2 per cent higher than they were in October 2011.
Retailers can also expect Aussies to start splashing the cash over the busy festive period.
AMP Capital Shopping Centres recently revealed that Aussies are planning to spend more on clothes, shoes, electronics and domestic holidays in the next few weeks.
The company also stated that people will not rely entirely on internet retailers and bricks and mortar stores should perform well in the run up to Christmas.
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