Aussies shun Xmas spending for Black Friday, according to fresh analysis of spending habits

A fresh analysis of the spending habits of millions of Aussies has revealed the one habit they no longer do before Christmas.

Aussies are opting to do their Christmas shopping early rather than wait until December with fresh data cementing the impact of Black Friday sales on spending habits.

The Commonwealth Bank’s household spending insights (HSI) index fell 3.9 per cent in December as the cumulative effect of successive interest rate rises hit hip pockets.

CBA senior economist Belinda Allen said the fall in December more than offset the gain of 1.6 per cent in November.

The weak result was in line with expectations and baked in the shift in spending patterns around the Christmas period as shoppers continue to be lured into Black Friday/Cyber Monday deals.

Aussies spent up big in November. PICTURE: NCA Newswire / Nicki Connolly

But the fall in spending last December outstripped that of the year prior (-3.1 per cent) and in December 2021 (-2.1 per cent).

“Households in all states reduced spending in December, led by declines in Victoria, South Australia and New South Wales,” Ms Allen said.

“With the pace of economic growth in Australia moderating and the full impacts of November’s rate rise yet to flow through to the consumer, we expect a further slowdown in the pace of household spending over the coming months.”

Furniture and household appliances led the decline (-16 per cent), followed by a decline in spending on recreation (-6.5 per cent), food and beverage (-2.7 per cent) and hospitality (-0.8 per cent).

The falls were partially offset by increased spending on transport (+1.0 per cent), insurance (+0.6 per cent) and health (+0.2 per cent).

In the year to December, the pace of the increase in the HSI index slowed to 3.1 per cent.

Insurance (11.6 per cent), health services such as nursing home and GPs (7.5 per cent), and education (6.9 per cent) were the strongest contributors to spending in the year.

Aussies are spending more on Black Friday and Cyber Monday rather than in December. Picture: NCA NewsWire / Nicholas Eagar

The CBA’s data captures the spending of about 7 million households comprising roughly 30 per cent of all of Australia’s consumer transactions.

The figures give an insight into how Australians are faring in the wake of the Reserve Bank’s rate hikes in its battle to bring down inflation.

Inflation dropped to a near two-year low of 4.3 per cent in November but remains well above the RBA’s target range of 2 to 3 per cent.

Ms Allen said the moderation supported the CBA’s view that successive months of interest rate hikes were in the rear view mirror.

“We have also seen inflation moderate which supports our view that the monetary policy tightening cycle has come to an end and that the RBA can join the expected global shift and start to lower interest rates in September this year, ” she said.

The CBA has forecast rates to be slashed by 75 basis points in the second half of 2024 and a further 75 basis points in 2025.

Originally published as Aussies shun Xmas spending for Black Friday, according to fresh analysis of spending habits