Christmas spending expected to take a dip, says IBISWorld

By Ceyda Erem ·
xmas-spending

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.

Need a top place to stash your Christmas fund? Our savings account comparison tool can help you compare some of the latest savings accounts from more than 60 banks.

Compare high interest savings accounts - page last updated October 17, 2020

Search promoted savings accounts below or do a full Mozo database search. Advertiser disclosure.

  • mozo-experts-choice-2020

    1.50% p.a. (for $0 to $250,000)

    0.15% p.a.(for $0 and over)

    Yesup to $250,000

    Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Everyday or Glide transaction accounts.

      Compare
    Details
  • 1.15% p.a. (for $0 to $250,000)

    0.01% p.a.(for $0 to $5,000,000)

    Yesup to $250,000

    Minimum deposit of $200 and no withdrawals in the month.

      Compare
    Details
  • mozo-experts-choice-2020

    1.20% p.a. (for $1 to $250,000)

    0.20% p.a.(for $1 and over)

    Yesup to $250,000

    Ongoing bonus rate applied if in the previous month $1,000 or more is credited to the linked Day2Day Plus account and 5 eligible transactions are made by the linked account.

      Compare
    Details
  • 1.60% p.a. (for $0 to $50,000)

    0.10% p.a.(for $0 and over)

    Yesup to $250,000

    Make 5 or more successful card purchases per calendar month using your Up debit card and digital wallets (ATM transactions excluded).

      Compare
    Details

^See information about the Mozo Experts Choice Savings Accounts Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.

Ceyda Erem
Ceyda Erem
Money writer

Ceyda Erem is Mozo’s authority on Energy, as well as having broader expertise as a personal finance writer. She loves to put her researching and writing talents into stories that help our readers to make more informed financial choices, whether that’s about finding the best energy deal or writing about the latest sneaky bank tricks. Ceyda has a Bachelor of Arts (major in writing) from Macquarie University.