Australian shoppers are gearing up for a record-breaking Black Friday and Cyber Monday shopping spree. According to Roy Morgan research, Australians are expected to spend $6.7 billion during the four-day sales event. This marks a 5.5% increase from last year, highlighting the growing popularity of Black Friday over traditional Boxing Day sales.
End-of-Year Sales Drive Spending
The Black Friday period contributes to an estimated $69.7 billion retail boost in the six weeks leading to Christmas. This is a 2.7% rise compared to 2023, demonstrating the resilience of consumer spending despite economic challenges.
Paul Zahra, CEO of the Australian Retailers Association, said shoppers are becoming savvier.
“Shoppers are being savvier than ever with their dollars,” Zahra said. “They’re looking for the best value when it comes to buying presents for their loved ones, which is why sales events like Black Friday/Cyber Monday weekend are consistently growing in popularity.”
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Cost-of-Living Pressures Influence Spending
Research from Monash University’s Business School shows almost two-thirds of Australians plan to shop during November and December sales. Shoppers expect to spend an average of $481 on Christmas presents for immediate family. Spending on extended family and friends adds significantly to this total.
Lead researcher Stephanie Atto said end-of-year sales provide relief for families managing tight budgets.
“Australians are feeling the pressures of cost of living at the moment, with inflation and high interest rates,” Atto said. “They are saving up to take advantage of promotional periods. These sales events offer a welcome reprieve and an opportunity to snatch a bargain in time for Christmas.”
Retailers Pin Hopes on Peak Season
For retailers, the holiday season remains crucial. More than 70% of small retailers said Christmas trading is vital to their business, according to the Australian Retailers Association.
Fleur Brown, Chief Industry Affairs Officer, emphasised the significance of peak season sales.
“This peak season trading period is more essential for retailers than ever,” Brown said. “Many discretionary retailers make up to two-thirds of their annual profits during this period.”
Around 44% of retailers expect sales to increase compared to 2023. To attract financially pressured shoppers, 28% of businesses plan to offer more promotions.
Food and Hospitality Lead Spending
Food purchases will dominate spending this season, with Australians projected to spend $28 billion, up 4.2% from last year. Hospitality is also expected to see growth, with $10.6 billion in spending forecasted, representing a 4.7% increase.
Other retail categories, including books, cosmetics, and recreational goods, are set to see a 4.7% increase, reaching $10.8 billion. Clothing sales are predicted to grow by 3.3%, totalling $5.7 billion.
However, not all categories are thriving. Department store spending is expected to drop 1.5% to $3.6 billion, and household goods spending will decrease by 3.8%, totalling $10.7 billion.
Regional Spending Variations
Across states, New South Wales is set to lead with $21.9 billion in spending, a 3.4% increase from last year. Tasmania expects the highest growth at 5.9%, while Queensland will see a 3% rise. Victoria and Western Australia anticipate smaller increases of 2.3% and 0.2%, respectively.
Shoppers Warned About Dodgy Discounts
Despite the excitement, shoppers are cautious about misleading sales tactics. Finder research revealed over half of surveyed Australians noticed price increases before sales.
“Some retailers artificially inflate prices right before a sale to make the discounts seem larger than they actually are,” Finder shopping expert Chris Jager said.
Buy-Now, Pay-Later Usage Increases
The research found 30% of shoppers plan to use buy-now, pay-later schemes during the Black Friday period. Ms Atto said this trend reflects financial pressures on families.
“These schemes provide a way for shoppers to manage costs, but they must be used responsibly,” she advised.
A Challenging Year for Retailers
Zahra acknowledged the challenges faced by both retailers and consumers in 2024.
“It has been an incredibly tough year for retailers and shoppers alike,” he said. “Retailers are pulling out all the stops to ensure they have the best product lines and gift solutions.”
Retailers are also enhancing online platforms and customer service to streamline shopping experiences during peak season.
Conclusion
The Black Friday and Cyber Monday sales period offers Australians a chance to maximise savings amidst cost-of-living pressures. For retailers, it provides an opportunity to recover from a challenging year and bolster profits ahead of the festive season. As shoppers hunt for deals, experts encourage vigilance against misleading discounts and mindful spending during this crucial retail period.
