With the latest economic data revealing slower-than-expected GDP growth and persistent concerns about household budgets, the holiday season is shaping up to reflect Australians’ shifting financial priorities.
The latest MYOB Business Monitor: SME Performance Indicator shows small businesses have been disproportionately impacted by current economic conditions, resulting in a SME Performance Score of -2.3 for August 2024 (where maximum deviation from GDP is benchmarked at +5/-5), down from –2.0 since the last data capture in May. Inflation and interest rates and the resulting impacts on discretionary spending have further softened outputs for SMEs.
Over half of Australians (58%) are concerned about managing their Christmas budgets, with one-third (34%) relying on credit cards for holiday purchases and 24% planning to spend less.
However, sentiment is improving, with fewer people planning to cut back on festive spending, signaling an opportunity for retailers to engage last-minute shoppers.
In more positive news, Australians are prioritising homegrown products with 61% willing to pay more for Australian-made products and 36% less focused on international online purchases. For local businesses, this presents a golden opportunity to tap into growing consumer preference for supporting the national economy.
While many Australians have taken advantage of the Black Friday sales for Christmas shopping, there’s still opportunity in December for local retailers that focus on value, creativity and homegrown products, to stay relevant to emerging consumer preferences.