Wealth reduction impacts spending habits

Remember the days when the economy was thriving and retailers across Australia were raking it in?

It seems like a very long time ago now, but Australia was riding the crest of an economic wave in 2007 – and then everything went wrong.

The global economic downturn forced many people to seriously reassess their spending habits and shop owners have been struggling to attract trade ever since.

Managing director of Westfarmers Richard Goyder told Bloomberg that Aussies are now more intent on putting money away in their savings accounts.

He said that household wealth has been destroyed in the past four years or so and it is little surprise that Aussies are being far more careful with their cash these days. In fact, Australians are now saving twice as much money as people in the US.

"If they’ve got an opportunity, people are saving more money," Mr Goyder was quoted as saying.

"People are more cautious, understandably more cautious," he added.

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