Christmas spending expected to take a dip, says IBISWorld
From smaller crowds to limited hugs, there's no doubt Christmas will look anything but traditional this year. And according to new research from market researcher, IBISWorld, Aussies aren’t looking to spend big either this festive season.
IBISWorld found that Christmas retail spending is expected to decline across certain areas, such as electronic goods (-2.7%), pharmaceutical and cosmetic goods (-1.5) and department stores (-1%).
“Although many households are likely to receive a cash injection from the recent Federal Budget, there is a high likelihood that these funds will be saved rather than spent, providing little help to the ailing retail sector”, said IBISWorld senior industry analyst, Yin Yeoh.
“Consumer electronics retailing is expected to be 2.7% lower this December, relative to last Christmas. Department store turnover is expected to be 1.0% lower, at $2.8 billion.”
But while we might not be splurging on flashy gifts for our friends and family, grocery and liquor spending is expected to increase by 2.8% and 3.6%, respectively.
“Families are expected to go all-out on their Christmas feasts this year, with many Australians celebrating their ability to reunite with family after states reopen borders and ease social distancing regulations,” said Yeoh.
Unsurprisingly, online spending will also grow by 6.4% in the 2020/21 financial year, as more households make the effort to shop around to get a better deal and reap the benefits of home delivery.
Buy Now, Pay Later (BNPL) will also be a popular payment method among households, as more Aussies are expected to ditch their plastic to avoid holiday debt.
“Mozo research shows that Aussies are taking steps to eradicate their debt during the pandemic, so it’s not surprising to see that Buy Now, Pay Later usage will surge during the holiday season,” said Mozo Director, Kirsty Lamont.
This research correlates with recent research by BNPL platform, OpenPay, which found that almost a quarter of Aussies in Sydney and Melbourne are using BNPL to manage their spending during the pandemic.
Mozo’s top three tips for budget-friendly Christmas spending
If you are thinking about getting a head start on your Christmas shopping, you might be wondering about the best way to score some awesome goodies for your loved ones without breaking the bank. So before you start adding things to your virtual cart, here are our top three tips:
- Set a spend limit - While it’s important to set a budget for your overall Christmas spending, it's also a good idea to set a spend limit for every person you’re buying a gift for. This is a great way to prevent overspending, as you aren’t allowed to exceed your set limit.
- Source some extra cash - According to Gumtree’s 2019 Second Hand Economy report, the average Aussie household has over $5,000 worth of unwanted items that could be sold online. So if you’re looking for a way to make some extra cash, this might be a great way to top up your Christmas fund.
- Organise a Secret Santa - Over the last few months, we’ve seen many Aussies rethinking their spending habits due to COVID-19. If money is tight for your household this year, try organising a Secret Santa amongst your family and friends to save on Christmas shopping.
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