With higher inflation and other macroeconomic pressures, many Australian households are tightening their belts. As consumers manage cost of living pressures, it’s led to a pullback in spending across the retail landscape, particularly in non-discretionary categories.
CommBank’s latest Consumer Insights Report shows that around one in four Australians have not enough, or just enough, to meet household expenses. These consumers are the most likely to be frugal, but the adoption of a more discerning mindset is more universal.
Most consumers confirmed they have recently reduced spending across all categories, particularly more discretionary goods and services. For example, 70 per cent are collectively spending less on pubs and clubs, fast food, and restaurants. The same is true for 55 per cent of consumers of recreational goods and 51 per cent in the electronics and entertainment category.
The survey confirms that those who are spending less across hospitality and discretionary retail categories are most likely to be redirecting those funds towards everyday expenses like rents, mortgages or to pay their increasing utility bills. In fact, consumers indicated that on average, they were reallocating approximately $450 per month, largely towards essential goods and services or savings.
However, spending alone is only part of the picture. Looking closer at consumer behaviours confirms a broad shift in shopping choices and heightened customer experience expectations.
For example, the research shows that 73 per cent of consumers are using promotional codes, cashback offers and rewards to make their dollar go further, and 66 per cent are doing more research before purchasing. Turning to trusted brands is also expected to remain a priority for many consumers. This suggests that while consumers have reviewed how they shop in the current economic climate, many will be more selective over a longer-term horizon.
Hospitality – clubs & pubs
The CommBank Consumer Insights Report includes segregated information on ‘club & pub’ and ‘restaurant & café’ data and the drivers and incentives currently popular among guests. For clubs & pubs those imperatives included: friendly and knowledgeable staff (98%), in venue experience (94%), a range of budget menu items (88%) and a wide range of payment options (79%) among many others.
To get your copy of the report go to: insideretail.com.au/client-report/commbank-consumer-insights