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Australia witnesses strong consumer spending rebound: ShopBack report

Image credit: Arturo Rey

Australia witnesses strong consumer spending rebound: ShopBack report

The Australian and APAC’s rewards and discovery platform, ShopBack, said that it is seeing a strong consumer spending comeback as Australians enjoy their post-lockdown freedom. 

According to ShopBack Australia General Manager Angus Muffet, travel has had a rocky ride since the COVID-19 pandemic began, with consumer trust at an all-time low as state and national borders opened and closed without notice.

“With restrictions lifting and double vaccination rates above 80% travel is now making a sharp return, ” Mr Muffet said.

“ShopBack Australia’s transaction data shows a strong rise in online travel bookings in the tail end of 2021 as consumers once again have confidence to plan holidays and trips to see friends and family.

“Online travel bookings are up 55% on pre-Covid 2019 levels. Total online travel sales were a massive 329% higher in October 2021 than in October 2020 with the average online travel order jumping from $490 in October 2020 to $1,040 in October 2021.”

The online share of retail spending increased to 16.3% in 2021, up from 11.3% in 2020 with over nine million households buying online in the last 12 months. ShopBack customers spend $170 on average each order, up from $128 in October 2020. 

Mr Muffet stated that consumers were spending more on individual items across a variety of categories, with fashion and cosmetics sales increasing as restrictions were lifted and consumers began to step out again. 

Customers spent an average of $140 per order on fashion in October 2020, rising to $175 per order in October 2021.

“For online fashion and beauty orders, total sales in both categories were 41% higher in October 2021 than in October 2020,” Mr Muffet added.

Pre-Christmas spending

The Australian Retailers Association (ARA) and strategic partner Roy Morgan have forecasted that 2021 pre-Christmas spending will generally match 2020’s high and be much higher than pre-pandemic spending in 2019. 

According to the ARA-Roy Morgan 2021 pre-Christmas Retail Sales estimate, total expenditure would be $58.8 billion, nearly identical from last year but up 11.3 percent from pre-pandemic conditions.

“There’s a lot of Christmas cheer in these numbers, with the overall trend looking positive, and that is great news for small businesses and discretionary retailers who have suffered through some of the longest lockdowns in the world this year,” ARA CEO Paul Zahra said. 

“The Christmas trading period is critical as it’s the time when most discretionary retailers make up to two thirds of their profits for the year.

“Although the ARA-Roy Morgan data predicts the impact of Covid lockdowns will continue to suppress retail sales, year-end spending in NSW and Victoria will bounce back strongly in December. 

“And those states not impacted by lockdowns will enjoy a more gradual ramp-up in sales growth leading into Christmas. The overall trend is looking positive,” Mr Zahra added. 

Roy Morgan CEO Michele Levine believes this is good news for Australia: “Our sales forecasting reveals a country on the move; a consumer economy exhibiting all the signs of pent-up demand.

“No one believed that spending this coming Christmas could match the highs of last year, but as the population emerges from the most punishing crisis in a hundred years, shoppers are looking to reward themselves and their families.

“The sales aren’t all going to be in store, however. The COVID 5-year digital acceleration means many more Australians are shopping online, so this Christmas we will see much more of a mix between in-store and online shopping,” Ms Levine said.

$2.8 billion package

The New South Wales (NSW) government had earlier announced a $2.8 billion package designed to speed up rehabilitation following the three-month lockdown caused by the Delta COVID-19 Delta outbreak. The programme is aimed at families, individuals, and businesses across NSW.

The Economic Recovery Strategy, which was unveiled in October, includes funding to stimulate economic activity in cities and regions, with a particular emphasis on rebuilding and supporting businesses, helping the hip pocket, and increasing job opportunities. 

Premier Dominic Perrottet and Treasurer Matt Kean announced that as part of the package, families with school-aged children will get $250 in vouchers in 2021 to promote spending and economic activity.

“One of the biggest challenges for so many families during lockdowns was learning from home, and now as life returns to normal we want to encourage people to get out and boost economic activity,” Mr Perrottet said.

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Yajush Gupta

Yajush Gupta

Yajush is a journalist at Dynamic Business. He previously worked with Reuters as a business correspondent and holds a postgrad degree in print journalism.

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