The financial strain of the holiday season is looming large for Australians, with 38% expressing concerns over the extra expenses expected this December.
A recent study by global data and insights company, Pureprofile Limited (ASX: PPL), reveals that 65% of Australians are cutting back on their Christmas spending for the second consecutive year. As a result, gift budgets are shrinking, and concerns about the cost of living are causing businesses to scale back on Christmas celebrations.
Pureprofile’s 2023 Christmas Report, now in its fifth year, gathered insights from 4,500 panel members in Australia, New Zealand, the UK, the USA, and Singapore. The report highlights a growing trend of Australians curtailing festive season celebrations, with 42% planning to buy fewer gifts and 60% avoiding travel to reduce discretionary spending. Despite the budget constraints, over half (54%) of Australians remain optimistic about the holiday season.
This pattern mirrors other countries’ experiences, with 65% in New Zealand, 57% in the UK, and a substantial 73% in Singapore expecting the rising cost of living to impact their Christmas spending. In contrast, 53% of Americans anticipate their spending will remain unaffected.
Trimming Christmas Expenses
The focus of Christmas preparations in Australia appears to be on cost-saving measures. Approximately 43% of Aussies are planning to spend less on food and drinks this holiday season, up from 37% in 2022 and 28% in 2021. While the average food and drink budget ($306) remains on par with the previous two years, one in four is seeking more affordable alternatives as rising grocery prices persist. For 20%, the ultimate holiday wish is the gift of cheaper groceries.
After a surge of early Christmas shopping in 2022, only 67% of Australians plan to shop for presents in November or earlier. This marks a decline from 72% in 2022 and 69% in 2021. Globally, most people intend to shop between November and early December, but a significant portion of Americans plan to leave their shopping until the week before Christmas.
Martin Filz, CEO of Pureprofile, commented, “This marks our fourth consecutive Christmas season characterized by tighter budgets and reduced spending. Australians are reducing discretionary expenses on travel and gifts, typical in challenging times. We are now also seeing a shift towards budget-conscious choices in essentials like food and drink. Australians are embracing more thoughtful and intentional spending, preserving the holiday spirit while embracing simpler and more meaningful celebrations.”
Filz also emphasized the importance of businesses, policymakers, and government agencies staying attuned to evolving consumer sentiments and trends. He stated that the data from their Christmas Report underscores the dynamic nature of consumer behavior and the need for agility and adaptability to support consumers during changing times.
Gift-Giving Trends
Australians are adopting a more intentional approach to gift-giving, with 42% opting to purchase fewer gifts or only selecting presents for their children (22%). Gift budgets have declined for the second year in a row, decreasing from $430 in 2021 to $424 in 2022 and further to $388 in 2023.
Gifting budgets have also seen declines in New Zealand (by $47) and the UK (by £3). In contrast, the average gifting budget in America is $420, and Singapore’s is $223.
The preferred gifts among Australians remain consistent with previous years, with gift cards and money topping the list (47% for giving, 44% for receiving). Other desired gifts include clothing and shoes (28%) and food or drinks (27%). Preferences in other countries reflect different trends, with the USA exhibiting the strongest gifting culture and Australia the weakest.
Staying Home for the Holidays
Globally, approximately half of the population plans to travel for Christmas 2023, with international travel being less common in most countries. However, almost a quarter of Singaporeans intend to travel abroad.
Conversely, most Australians (60%) will celebrate locally, with only one in three planning local or interstate travel. The majority (56%) will spend Christmas Day enjoying a meal with their family at home, while others opt for a beach day (11%), a wilderness cabin getaway (11%), or a fancy dinner out (10%). Surprisingly, 12% prefer to spend the holiday alone.
The report also reveals that 45% of Australians anticipate their workplaces will cut back on Christmas celebrations, with nearly a quarter (24%) expecting no company party at all.
The 2023 Christmas Report by Pureprofile covers a range of topics, including attitudes towards taking annual leave during the holidays, beliefs about religion and spirituality, and sentiments related to Christmas festivities.
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