Australians will cut their spending on discretionary items by 21% over the first six months of the year, according to new figures from the Australian National Retailers Association.
Over 1000 retail consumers were quizzed for the survey, which found Australians are likely to cut their retail spending on items such clothing, shoes, furniture and appliances.
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Those aged between 55 and 64 are most likely to curb their spending, with respondents citing an average 35% reduction in discretionary shopping. The ANRA says this is most likely due to the loss in value of superannuation and share portfolios.
But younger shoppers aged between 18 and 26 will still be out and about, with respondents claiming just an average 15% reduction in discretionary spending.
Males will also cut back more than women, with men claiming an average 23% cut to spending compared to females at 18%.
The retail sector in the ACT should brace itself, with respondents claiming a 32% reduction in discretionary spending. SA followed closely at 31%, with WA next at 27% and NSW at an average 20% reduction.
But retail analyst Rob Lake says while many are preparing to downgrade their discretionary spending, the sector may still hold up if younger shoppers keep spending.
“The reality is that most retailers are doing well, still. If Gen Y outspends the Baby Boomers – which you would expect – then this survey isn’t as alarming as might appear.”
Lake also says the retail industry is performing better than others may expect.
“I think people’s behaviour is different from what many are saying they’re doing. Most retailers did very well over Christmas and it’s continuing over in January. We’ve got people like JB HI-Fi who are going gangbusters. Retail Food Group also posted a good result.”
“On the other hand, you’ve got Gerry Harvey grumbling. But he needs to go back to selling merchandise instead of finance such as “five- years-interest-free” and all that. But good retailers – they’ll be okay.”