Survey Shows Australian Consumers are Bound to Spend Less for This Year’s Christmas
Christmas 2009 may not be the happiest Christmas for Australian retailers after they learned that Australian consumers will settle for a smaller budget for the holidays.
A recent survey conducted by the Melbourne Institute and Westpac Bank showed on Monday that 35% of the respondents are categorized as expected to spend less on Christmas presents this year than the previous year. 50%, on the other hand, are expected to spend just about the same as they spend their Christmas last year, while only over 14% said they plan to spend a little more.
Digging into more details in the survey, approximately 40% of the Australian households are expected to spend more then AUS$500 on Christmas gifts, while around 25% are expected to spend anywhere between AUS$300-500 and a little over 30% of the total respondent households are expected to spend less than AUS$300. This gives the total respondents an average of almost AUS$320.
While the consumer confidence index is at 118.3 this month despite the kicking off of the Reserve bank of Australia’s monetary tightening cycle, the household’s spending intentions for Christmas are in contrast to the sentiment levels in Australia, not to mention the bank’s increase in the benchmark interest rate by 25 basis points for each of the last two meetings.
According to Matthew Hassan, Senior Economist at Westpac, "Christmas spending intentions are at odds with buoyant levels of consumer sentiment," "Some of the planned reduction may reflect the boost to last year's Christmas spending from the government's A$8.7 billion in fiscal payments. This helped drive a 4% jump in retail sales in December 2008 over and above the normal seasonal rise."
"But there may also be a regular bias towards restraint heading into Christmas that eases as the season gets under way," Hassan said.