NAB predicts cost of living pressures to rein in Christmas spending
Australians will be making forced changes to their spending intentions this Christmas, with six in 10 deciding to pull back on presents to counter growing pressures on household budgets.
Australians will be making forced changes to their spending intentions this Christmas, with six in 10 deciding to pull back on presents and holiday expenditures to counter the growing pressures on household budgets from cost of living pressures.
According to the latest consumer and retail insights from bank NAB, consumers are increasingly driven by bargains and rewards to make money go further at a time when higher mortgages, rents and utility bills are eroding their disposable income and limiting the amount of money they can spend on Christmas presents and treats.
The latest NAB insight reveals that 60 per cent of Australians are ‘extremely likely’ to change their spending patterns this Christmas to better manage increased living costs. For many shoppers this could mean leaning on loyalty programs to earn rewards points, trading down on brands or products, or completing their shopping early to benefit from big sales and discounts.
The growth in popularity of loyalty programs, which are being used by consumers to leverage their spending power and make up for strains on their spending.
In November The Australian revealed that the nation’s largest loyalty scheme, Flybuys, had witnessed a large leap in redemptions of points over 2023 as households facing cost of living pressures used their accounts at Flybuys retail partners such as Coles, Bunnings and Officeworks. Flybuys recorded year-on-year growth of more than 8 per cent.
In the last year, NAB customers redeemed 11.5 billion rewards points from the NAB rewards program and redeemed $12.1m worth of gift cards.
NAB personal banking executive Kylie Young said Australians were honing their shopping skills to get around the cost of living crunch this Christmas.
“With living costs remaining high, Australians have become laser focused on seeking out bargains and discounts,” she said.
“Black Friday and Cyber Monday are great examples of budgeting in action and, even though Australians spent $1.6bn extra during these sales this year, it shows they planned ahead and took advantage of bargains.”
The NAB estimates that Black Friday and Cyber Monday sales totalled $8.7bn this year, compared to the $7.1bn spent during the same sales period last year. This spending splurge has made the Black Friday weekend bigger than Boxing Day, and has dragged forward shopping purchases from December into November.
Meanwhile, NAB believes the busiest shopping window this week is expected to be 12pm – 1pm on December 22 and December 23, with shoppers expected to spend around $3.33bn across the two peak hour windows in a last desperate attempt to find presents for themselves, others and those friends and relatives who are always hard to buy presents for.
“People are also staying much closer to their finances to help manage or track costs to avoid a budget blow out,” Ms Young said.
“Customers with Christmas related goals in the NAB app are aiming to save on average $3,000 by the end of 2023. More people are also checking their spending tracker in the NAB app and internet banking in November and December than in other months, helping them navigate their festive spending.”
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