As the festive season arrives, retailers are getting ready for their busiest season of the year, and consumers are getting ready to find the best deals.
When are consumers shopping?
While many have only just begun to put up decorations and get into the spirit, research from Afterpay shows that Christmas is coming early, with 67% planning to complete most of their Christmas shopping between September and November.
Strategic shopping has also pushed this, with Pure Profile CEO Martin Filz telling Azzet that 55% of shoppers intend to shop on Black Friday or Cyber Monday, up from 45% in 2024 and it is most prevalent with younger shoppers.
“This highlights how these November events have become a key anchor in the holiday sales cycle and a major driver of retail activity,” Filz says.
“Twenty-five-34 year 34-year-olds are the most likely to bring their Christmas shopping forward to take advantage of Black Friday and Cyber Monday deals.”
According to ARA and Roy Morgan research, Australians are likely to spend a record A$6.8 billion over the Black Friday-Cyber Monday weekend, a 4% increase from 2024.
The average spend is tipped to come in at A$804 per person, with shoppers remaining deliberate about their spending.
The ARA survey showed that 66% of shoppers planned to buy gifts and items for themselves on the sale weekend, with the key motivations of low prices, great deals and saving money on Christmas gifts.
Deloitte research found that Balck Friday participation is growing in Australia, with 44% expected to take part this year, up 3% from last year.
“Retail is Australia’s largest private sector employer, contributing $430 billion or 18% of national GDP,” ARA CEO Chris Rodwell said in a media release.
“Every dollar spent with a local retailer or national brand this Black Friday helps build confidence, employment and long-term resilience across the sector.
“Unlike overseas ultra-cheap digital platforms, our local and national retailers invest in training, wages, innovation and community connection — that’s worth backing this season.”
How much are they spending?
Over the entire festive period, Filz says Christmas is expected to increase 5% from last year to A$491, and spending on food and drink is forecast to soar by 25% to A$506.
“Additionally, 15% of Australians plan to spend more than $1,000 this Christmas, with this trend strongest among those aged 45–54, where around one in five (22%) expect to splurge,” he says.
The sharp increase in food and drink spending can be attributed to the rising cost of living, changing Australians’ priorities this holiday season.
“While average spending on gifts and food and drink is expected to rise, 38% Australians say they will spend less on gifts, and over one in five (21%) plan to choose more budget-friendly food and drink options,” Filz says.
The increase in spending also mirrors the September ABS monthly household spending data, which found that spending grew 0.2% for the quarter and 5.1% year-over-year.
Food and drink were one of the growing categories, rising by 0.6% month-over-month and 1.1% on a quarterly basis.
Other retailing, which includes online and recreational goods, was up 7.2% year-over-year and 1.1% month-over-month.
“We’re cautiously optimistic heading into the season. Retailers are working hard to deliver great value and service, and shoppers are responding. A steady spending environment provides the confidence needed to finish the year strongly,” Rodwell said in a media release.
As for gifts, Filz said Australians are looking for versatile and practical gifts.
“Gift cards remain the most popular choice, with 43% of shoppers selecting them, maintaining their position as the top gift year after year,” he says.
“Clothing and footwear follow closely at 40%, reflecting strong demand for wearable and personal items.”
Food and drinks, and skincare, cosmetics and fragrances are also popular gift options, which Filz says prioritises shared experience and indulgence as well the ongoing appeal of self-care.
Filz says this festive season Australians want cheaper food prices (23%), a joyful day with family (21%), reduced interest rates (16%) and lower power and energy bills (16%).
What does this mean for retailers?
While online shopping remains popular, especially with 35-33 year olds, Filz said 61% of shoppers still prefer to shop in brick-and-mortar stores.
“Retailers are capitalising by creating the Christmas atmosphere in-store earlier in November,” he says.
Filz also says retailers can capitalise on what shoppers value most in a good deal.
“For example, nearly half (48%) of consumers say they prefer 'percentage off' offers, compared to only 5% who favour 'gifts with purchase',” he says.
“Ultimately, understanding your customer remains the cornerstone of a successful retail strategy.”
For online stores, he suggests highlighting clear savings, offering free shipping and creating convenience for the consumer.
“On top of helping consumers stretch their budgets, retailers should also make sure their checkout process is intuitive, products are well categorised, and websites are easy to navigate,” Filz says.
There’s also a shift in how Australians are spending, according to Filz, as consumers become wary of credit.
“Only 40% plan to use credit cards (down 7 percentage points from 2024) and just 15% plan to use BNPL services, while debit use continues to rise (56%, up 6 percentage points year-on-year),” he says.
Future outlook
Filz suggests that Australians’ value-first mindset will continue into the new year.
He says they are prioritising financial stability while maintaining balance across their health, travel, family and wellbeing goals.
“Over half of Australians (56%) aim to save more money next year, reflecting ongoing cost-of-living pressures,” he says.
“At the same time, many are seeking balance by prioritising their health and fitness goals (42%), travelling more (34%), enhancing their wellbeing (31%), spending more time with family (30%) and paying off debt/mortgage faster (30%).”
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