Jingle Those Retail
Jingle Those Retail
July 5th, 2016
Australians spent close to $8.9 Billion in the 2015 Christmas period and we are expected to spend approximately $8.8 Billion this year. When you consider that the population of our island is 25 million in 2016 and 24 million last year (2015), there are a few things that need to be looked at, to explain and understand the significance of these numbers.
Firstly, let’s look at the basic aspects of these numbers that makes it substantially surprising and depending on which side of the fence you sit on, whether these are good signs or concerning signs.
- We are more financially savvy and we are looking for better prices/deals
- We are using less credit cards and have saved money throughout the year
- We are buying quality rather than a large quantity of presents
- We are not so materialistic in our approach to Christmas
- The distribution of the budget has changed and we spend more on trips and festive food/drinks
- We are waiting for the post-Christmas Sales
- We are buying more items at a reduced price online
- Prices of homes have skyrocketed and the level of disposable incomes has shrunk
- Lack of confidence in the market and saving for a rainy day
- People are earning less now when you look at the ratio of inflation to wage increases
- The weakening of the Australian dollar has made the present of choice out of reach and we are aiming for the cheaper option
- More online purchases are outside of Australia so there is no intrinsic value to the retail numbers in Australia.
Looking at the obvious, we have grown by about 1 million new Aussies and we have spent less in gifts, approximately $371 per Aussie in 20 15 and $352 per Aussie in 2016. The average spend could be attributed to the above mentioned points but the reality still exists that the number has dropped by 100 million in estimated retail sales and an increase in the population has implications on how these numbers are viewed.
For an economy to grow and flourish we need supply and demand.
Supply – retailers invest heavily in stocking shelves with products.
Demand – consumers purchase as they shape up for a season of Christmas giving.
As happy little elf’s we purchase gifts for family and friends, so if we were to be spending less on presents, less on all Christmas activities and saving more money, this would mean we would have an economy that requires a defibrillator to steady the rhythm and get back on track.
The next 3 months will be very interesting for the Australian economy as we will be able to study the spending outcomes for the current environment. The greatest concern is that we cannot concretely report on the level of international purchases Australians make online and what will be the percentage of sales that Australian retailers have lost in sales, because of this.
Struggling with the ability to limit your spending this year? Check out our recent blog 7 Ways to Limit Your Overspending This Christmas to learn helpful tips.