South Australians to spend less this Christmas but more intend to buy local
Tuesday, 24 November 2020
More South Australians will cut back on their Christmas spending in 2020 amidst cost of living and general financial concerns, according to BankSA’s annual Christmas Spending Intentions research.
Overall, 30 per cent of South Australian households intend to spend less this Christmas, with almost two thirds (67 per cent) indicating this is directly due to the impacts of COVID-19.
However, in good news for South Australian businesses, 65 per cent of all South Australians have a preference to buy products made locally and 60 per cent plan to shop in-store.
BankSA Chief Executive, Nick Reade, said the intention to spend less was at its highest level in a decade, since the aftermath of the global financial crisis, reflecting caution after a challenging year for many.
“People are indicating they don’t want to be caught with high debt and financial stress heading into 2021, with cash and savings to be the main source of spending (69 per cent), followed by credit cards (23 per cent),” he said.
“However, it’s extremely encouraging that South Australians are conscious of where they spend their dollars to support local businesses who have also done it tough.
“There has been an upward trend of South Australians supporting locally made products over the past 12 months. The impacts of COVID-19 on the state’s small businesses, and a desire to help, is underpinning this strong positive shift to support and shop local,” Mr Reade said.
This year’s survey saw increased concerns around income security, with 67 percent of people aged 35-54 indicating their reduced intention to spend was due to a change in income circumstances (up from 33 per cent in 2019). There was also increased concern across all ages about the global economy - 61 per cent compared to 40 per cent in 2019.
While consumers will mainly be using cash and drawing on their savings to fund their Christmas gift purchases, intended credit card usage has lifted across all age groups.
“An intended lift in credit card usage is due to a number of factors, including the impacts of COVID-19, change of income and general financial pressures,” Mr Reade said.
“Young consumers are also turning to Afterpay as a payment method, albeit their third choice after cash and credit cards.”
The survey found the anticipated overall median spend on gifts is $400, with 64 per cent of consumers purchasing Christmas presents under $100 or less. Further, as a result of the impacts of COVID-19, respondents’ intention to buy gifts priced over $200 has experienced a 34 per cent decrease.
BankSA is supporting more South Australians to shop local this Christmas by publishing the 2020 BackSA Christmas Guide for the second year, which features more than 100 South Australian businesses and 325 gift ideas from across lifestyle, fashion, toys, beauty, lifestyle, food, wine and leisure.
“We’re actively putting our weight behind local businesses as part of our strategy to back SA and stimulate the local economy at a time when retail has been doing it extremely tough in an uncertain spending climate,” said Mr Reade.
“Our survey shows that the top three issues consumers have with Christmas shopping is cost, crowds and not knowing what to buy – the 2020 BackSA Christmas Guide can be of practical help to enable shoppers to plan ahead with affordable ideas that fit their budget and most importantly, support local.
“We hope that our support, along with the increased intention to spend locally, will help to soften any impact to retailers from the consumer sentiment to spend less this Christmas.”
In line with consumer sentiment, around 61 per cent of the South Australian gifts featured in the 2020 BackSA Christmas Guide are priced under $200 and 43 per cent under $50.
Mile End small business owner Ravi Kapoor, who stocks homewares and textiles at Eastern Silk, is featured in the BackSA Christmas Guide for the second year in a row and said initiatives to support local retailers was important in driving Christmas sales.
“Last year was incredible, it really helped a lot. Many people called, purchased and supported us,” Ravi says.
“To be part of the BackSA Christmas Guide again this Christmas and promote local businesses is more important than ever.”
Around 350,000 copies of the 2020 BackSA Christmas Guide, supported by well-known South Australians and business identities, will be delivered to local households, with a digital version also available online.