The majority of Australians (65%) will be curtailing their festive season celebrations this year, with 42% expecting to buy fewer gifts and 60% avoiding travel to cut down on discretionary spending. This is according to a new report from global data and insights company, Pureprofile Limited (ASX: PPL).
The report, which is now in its fifth year, is based on the insights of 4,500 panel members from Australia, New Zealand, the UK, the USA and Singapore. It found that the rising cost of living is the main reason for the cutback in spending, with 38% of Australians saying they are concerned about the extra demand on their finances this December.
Despite having to work within tighter budgets this year, over half (54%) of Australians are still feeling positive about the holidays. This is in line with most countries, with 65% of those in New Zealand, 57% of those in the UK, and a significant 73% of Singaporeans reporting that they expect cost of living concerns to hold back their Christmas spending this year. The outlier is America, with 53% stating that the increased cost of living will not impact their spending.
Preparations for Christmas Day
Food will be a focus this festive season as 43% of Aussies choose to spend less on food and drinks; this is up from 37% in 2022 and 28% in 2021. While the average food and drink budget ($306) is level with the previous two years ($310 in 2021 and $302 in 2022), 1 in 4 are also looking to find cheaper alternatives as Australians continue to battle rising grocery prices. In fact, 20% reported that their ultimate holiday wish would be the gift of cheaper groceries this year.
Gifts Underneath the Tree
Similar to last year, Aussies are more intentional about making their money count, spending on those that matter most by buying fewer gifts (42%) or choosing only to buy gifts for their children (22%). Gift budgets have also decreased for the second year in a row, from $430 in 2021, $424 in 2022 to $388 in 2023.
Gifting budgets have also seen a decline in New Zealand ($47 less) and the UK (£3 less). Meanwhile, America’s average gifting budget was $420, and Singapore’s was $223.
Gift preferences among Aussies, however, have remained relatively stable compared to previous years, with gift cards and money being the most sought-after gifts to give (47% and 24% respectively) and receive (44% and 36% respectively). Other desired gifts this year are clothes and shoes (28%) and food or drinks (27%).
‘I’ll Be at Home for Christmas’
Globally, around half of the population intends to travel for Christmas 2023. Only a small group ( less than 10%) will travel internationally in most nations, except Singapore where almost a quarter of people intend to travel abroad.
However, Australian social media feeds will be notably empty of jet-setting scenes this December. The majority of Aussies (60%) will stay local for the holidays, and only one in three will travel locally or interstate.
Most (56%) Aussies also report that they will spend Christmas Day enjoying a meal with their family at home, while a few will spend a hot day at the beach (11%), opt for a wilderness cabin in the snow (11%) or head out for a fancy dinner (10%). Surprisingly, 12% would want to spend time alone.
Outside of personal celebrations, the report also revealed that 45% of Australians are expecting their workplace to trim expenses for this year’s Christmas party, with almost a quarter (24%) expecting no party at all.
Pureprofile’s CEO, Martin Filz, said, “This marks our fourth consecutive Christmas season characterised by tighter budgets and reduced spending. While this is not surprising, it is interesting to note where Australians are making the most cuts – discretionary spending on travel and gifts are often the first to be reduced in challenging times. However, we’re also now looking to the likes of essentials like food and drink to recoup some celebration costs. We’re seeing a thriftier Australia that’s placing an emphasis on thoughtful and intentional spending; where the holiday spirit is retained, but celebrations take on a simpler, more meaningful tone.”