How consumers will spend the stimulus package
The latest report from The Australian Centre for Retail Studies provides outlook for spending of next stimulus package
- Paying off debt
- Some spending
The latest report from the Australian Centre for Retail Studies (ACRS) provides valuable insights into future spending intentions of Australians, particularly surrounding the upcoming stimulus package.
“Customers are adjusting their lifestyles and shopping habits to accommodate the financial downturn, and there are expectations of a large increase in the number of people that will be unemployed in the coming 12 months,” says Sean Sands, research fellow at the ACRS.
“Where possible, consumers are saving whatever money they can or reducing debt. This has implications for the likely behaviour when people receive the next stimulus package payment.
“Consumer reactions towards the stimulus package were generally positive and a quarter of those interviewed intended to spend more as a result of the package.”
Key findings of the Australian Consumer Climate Study, which covered 1010 consumers in all states across metro and regional areas, include:
The financial downturn is having a clear impact on most Australians however some optimism remains
- Almost 80% of those sampled report having changed their shopping habits as a result of financial pressures
- Consumers appear to be cutting out more expensive items (70%) and reducing their spend overall (65%)
- There is a reported move toward private label brands (57%) among consumers
- However, 69% of respondents expect the financial position of their household to get better or remain the same over the next 12 months
Consumers are looking to repay debt and save money from the stimulus package, though a portion of the package will be spent on retail trade
- About a quarter of the sample (27.4%) reported an intention to spend more as a result of the stimulus package
- Many respondents plan to put the stimulus package towards paying off debt (49%) and savings (31%)
- On average, respondents would spend $783 paying off debt
- Findings indicate that 56% of the stimulus package will be reinvested in the economy, with a possible 46% in retail
- In terms of retail trade, shopping for household items was highest followed by shopping for personal items
“While consumers are apprehensive about spending, this does not mean that they do not want to spend,” says Dr Sands.
“Consumers require a ‘reason’ to spend, they need to see value in an offer and have a reason to part with their money. The days of profit through mere volume of sales are likely gone – retailers need to understand the consumer and what motivates them in order to get them into the store.”
These results are from the fourth instalment of the ACRS Consumer Confidence Study to understand the mood among consumers.