Westpac report shows Australians are spending less but shopping locally
Australians are expecting to cut back this Christmas season but will use their spending power to support local businesses, according to a new Westpac consumption survey.
The latest spending research from the country’s second largest banking group found the coronavirus pandemic had prompted changes in consumption habits, with eight in 10 respondents saying they have cut back on eating out, travel and discretionary spending on clothing and footwear throughout 2020.
Westpac’s survey found 45 per cent of Australians still held concerns about the health of the economy post the COVID-19 shutdown, which fuelled the country’s first technical recession since 1991.
Despite the rise in cautious consumption, the bank’s national survey also revealed a growing awareness by consumers to buy locally and use their spending power to assist the domestic economic recovery.
Approximately 81 per cent of consumers said they were conscious of using their funds to support local business, with nearly half of respondents intending to purchase local produce or buy gifts from Australian retailers. Twenty-seven per cent said they were planning to spend money in rural and regional businesses over the period.
Westpac chief executive of consumer banking Richard Burton said COVID-19 had had a profound impact on household consumption and fuelled a shift in boosting savings and cutting back on discretionary spending.
“Despite households tightening their purse strings, consumers are motivated to use their purchase power to support the Australian business sector after a challenging period, particularly in the retail, hospitality and travel industries,” Mr Burton said.
“We’re seeing this reflected in consumer spending intentions and retail sales rebounding in the lead-up to Christmas, with Australians feeling more confident about spending and wanting to do their part in boosting the economy.”
The major bank also found 80 per cent of respondents were planning smaller Christmas celebrations and 68 per cent had intentions to spend less on presents.
Close to a third of Australians are planning domestic travel, according to the bank’s survey.
The conscious spending comes after the most recent Westpac-Melbourne Institute consumer sentiment index rose 4.1 per cent in December to a 10-year high of 122. This came off the back of a strong consensus that the worst economic shocks from the health crisis had passed.
“We’re seeing the rise of the considered Christmas celebration as households become more conscious about how and where they spend their money,” Mr Burton said.
“This means we can expect to see local produce on the Christmas dinner table, Australian-made presents under the tree, and families choosing to travel within their state or even stay at home over the festive season.”