Retail and holiday spending up, but spending intentions fall
Commbank has found that the overall household spending intentions of Australians has fallen in April. The latest data shows that the Commbank Household Spending Intentions Index (HSI) fell by 3.8% to 112.3% for the month.
The decline was said to be caused by falls in home buying, health and fitness and transport spending. This fall follows a record high in March.
Interestingly, spending rose across the retail sector as well as in travel and entertainment.
The spending increases in travel and entertainment are to be expected since the end of nationwide lockdowns and the opening of international borders, with travel spending even reaching a new record high in the month of April. This exceeded the pre-COVID peak.
Commonwealth Bank of Australia senior economist, Belinda Allen says that, “with an interest rate hiking cycle now underway the Australian economy is in a strong position. We are seeing a post COVID normalisation of consumer spending patterns, with lower spending on categories that increased during lockdowns like health & fitness, while higher travel and entertainment spending reflects more people being out and about.”
A less expected rise was seen in retail spending. With the 0.3% increase in retail spending said to be an unexpectedly strong reading for April which is normally a seasonally weak month.
Australian retail spending patterns
It is no secret that COVID-19 lockdowns caused an acceleration in online shopping but now that life is slowly getting back to normal, we are seeing that retail spending is continuing to increase, whether that be via online or in store shopping.
Amazon Australia is a popular place for Aussies to shop online, with a report by Pattern finding that this popularity is expected to increase significantly this year. Pattern found that 88% of Amazon’s Australian customers will spend the same or more on the marketplace in 2022, with the company’s Australian revenue hitting $1.75 billion in 2021.
Amazon sells a wide variety of products but according to Pattern, Aussies are expected to increase their shopping this year from categories such as luggage and travel, (expected growth of 60% of shoppers buying luggage and travel gear online), sport, fitness and outdoor (57% expected growth in the number buying on Amazon), home and kitchen (42% expected growth in those buying from this category on Amazon.)
According to Pattern’s general manager for Australia, Merline McGregor the findings demonstrate that not only has Amazon retained gains it made in Australia during lockdown, but it will likely continue to accelerate its growth this year too.
“Shoppers continue to migrate to online sales channels and, in a wide variety of categories, Amazon is poised to outperform the competition and acquire these customers,” she says.
While overall household spending intentions are down in April, areas such as travel, entertainment and retail are still increasing. It is suggested that the unexpected increase in retail spending recorded in April, may continue to rise due to the popularity of online shopping.
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