As we head into the end of year with Christmas and the summer holidays looming, we uncover what the festive season holds for Australians. With no relief in sight from inflation which is staying at higher-than-expected levels, interest rates at the highest levels for years, plus global uncertainty due to wars in Ukraine and Palestine there are many reasons why Australians may feel less than positive right now.
The Westpac-Melbourne Institute Consumer Sentiment index in Australia fell 2.6% to 79.9 in November 2023 down from 82 in October, returning to deeply pessimistic levels as the RBA’s November rate hike has put renewed pressure on family finances and reignited concerns about both the rising cost of living and the prospect of further rate rises to come. What does this mean for how Aussies will celebrate the festive season and summer holidays?
Our recent Focus On Christmas poll sheds light on current grocery shopper behaviours and preferences for the upcoming celebrations. The findings uncover a significant trend with two thirds (67%) of Australian households stating rising prices are forcing them to spend more to stay on par with last year’s festive season catering. This aligns with shopper trends from our annual Grocery Shopper study indicating more Australians are value hunting and strategic shopping, than ever before to maintain a similar living standard as 12 months ago.
Going into Christmas, shoppers are expected to continue trading down and shopping around for the best deals to meet their budgets. In a recent Age article, Coles Chief Executive Leah Weckert predicted shoppers will be choosing ‘sparkling wine, prosecco and rosé over champagne, swapping craft beer for mainstream brands, and picking up premixed drinks over spirits as Coles strives to prove it has a range of budget-friendly options ahead of Christmas amid rising cost-of-living pressures’.
Fig 1. What is the one food you can’t miss out on this Festive season?
Despite the cost-of-living pressures, Christmas just isn’t Christmas without celebration and dining on turkey, ham and seafood. A staggering 85% of Australians are gearing up to celebrate Christmas, showing the enormity of the festive season in our country. And when it comes to festive feasts, preferences diversify: 38% of households favour the classic traditional roast lunch or dinner, while 24% opt for a combination of roast and seafood. While 7% will enjoy seafood-exclusive meals, and 6% barbecues.
If Aussies need to leave any festive treats out of their shopping basket, over one third state they can’t afford to miss out on Christmas ham and nearly one quarter are determined seafood is a must on the dining table.
To Leah Weckert’s point, forget the champers this year as 25% of shoppers in our poll are saying they can’t miss out on beer at Christmas (no need to worry Santa there will plenty in fridges across Australia) and following the rise in non-alcoholic beverage consumption and catering for the little ones, 20% of households will definitely be consuming soft drinks.
Fig 2. What is the one drink you can’t miss out on this Festive season?
So what are households planning to spend on Christmas catering? On average, the home Christmas catering officer is preparing to feed 8 people, with an anticipated spend of $235. Notably, the 30-50 age bracket are the most significant spenders, earmarking an estimated $274 for Christmas celebrations.
Fig 3. How much are you budgeting to spend on food & beverage this festive season?
As we head towards the end of the year, we see the same value mindset coming through for many Australians shoppers planning a slightly more modest Christmas. From a grocery retail perspective this suggests that major supermarkets and associated liquor outlets will be the winners this festive season on the back of strong regular footfall and inflation driven spending
If you would like to know more about our Focus On Christmas poll please contact us.