Research shows that while the majority of Australians believe the global financial crisis is behind them, canny consumers will not part with their money lightly in 2010.
A retail insight survey by the Australian National Retailers Association (ANRA) and American Express has found 56 per cent of Australians believe the GFC is over, but only 39 per cent of people feel confident enough to spend on discretionary items like clothing, footwear, home wares and whitegoods.
“Shrewd shoppers will create challenges for retailers this year,” said ANRA CEO Margy Osmond.
“While ANRA is pleased to see an upgrade in the growth forecast for the retail sector, there are still a few obstacles on the path to recovery and rising interest rates is the largest hurdle. There have been four rate rises since October last year, which will continue to eat away at incomes and dampen consumer confidence.
“We’ve seen unprecedented discounting over the past 12 to 18 months, and shoppers are used to bagging a bargain. So much so, 47 per cent of those surveyed say they’ll only go shopping now when there is a sale on – this increased to 55 per cent among those aged between 25 and 34,” Osmond added.
Geoff Begg, vice president merchant services at American Express, said shoppers are becoming increasingly clued up on how to get the biggest bang for their buck.
“In the past 12 to 18 months shoppers have learned when and where to shop, how to pay for everyday items and how to use rewards points – all in the name of reducing their bill,” he said.
The survey shows that shoppers have entered 2010 with less debt than last year. Close to 50 per cent of those who received the Federal Government’s cash handout last year saved the money or used it to pay off their credit cards. This preference for cash as opposed to credit is reflected in the habits of shoppers during the January sales.
“Those who hit the shops during the January sales financed their purchases with their own cash or by using debit cards or gift vouchers (63 per cent) as opposed to credit (37 per cent), which is further confirmation of the cautious consumer,” said Osmond.