Almost a third of shoppers will spend less this Christmas and the average gift budget will drop 8 per cent, according to a survey by the Australian Retailers Association (ARA).
Retailers brace for 8% fall in Christmas gift spending
The research found just 9 per cent of consumers intend to spend more on gifts this year, but 30 per cent of shoppers will cut back, resulting in an average gift budget of $646 per person, down from $700 in 2022.
It said toys and games would be the most sought-after gifts (20 per cent of respondents), propelled by the resurgence of Barbie, followed by gift cards (18 per cent), and clothing, shoes and sleepwear (16 per cent).
ARA chief executive Paul Zahra expected this year’s shoppers to be more considered and deliberate in their spending.
“Many Australians are under significant financial pressure and their Christmas gifting behaviour will reflect this,” Mr Zahra said. “A big part of their buying mentality will be geared towards bang for their buck. Shoppers will actively seek out good deals, but they’re still looking for gifts that reflect their personal values.
“For retailers, sales and promotions will be more important than ever this year – especially on the marquee Black Friday and Cyber Monday weekend.
“With increased competition and reduced spending across discretionary categories, retailers will be mindful of shopper’s shifting spending focus and will be motivated to entice shoppers however they can.”
The survey, in collaboration with Roy Morgan, also found:
- A 3 per cent fall in the proportion of consumers who planned to purchase Christmas presents to 76 per cent.
- Two-thirds of shopping would be in store with just over one-third done online and one in five doing fewer web purchases than last year.
- Almost half of shoppers will buy an environmentally friendly gift.
ARA predicts Australians will spend $67.1 billion in the lead-up to Christmas, up just 0.6 per cent on 2022.
Much of this – almost 10 per cent for a record $6.36 billion – is forecast to be spent during the Black Friday sales, up 3 per cent on last year.
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