It’s looking like it’s going to be a better than feared COVID Christmas for many local businesses.
While most households firmly tightened their purse strings during the pandemic and boosted their saving as the economy slumped, more than eight in 10 consumers say they will buy local this Christmas as their way of propping up the national economy, according to new research released today.
Almost half of consumers are planning on shelling out for local produce, 45 per cent would buy gifts from local retailers and almost 30 per cent would support regional and rural businesses. In a boost for the local tourism industry, the Westpac survey of 2000 consumers also showed many are more than ready for a holiday, around a quarter planning to take a break within their state and 16 per cent a staycation.
Westpac’s acting chief of its Consumer Bank, Richard Burton, says the survey aligns with anecdotal experience as COVID-19 drove notable changes in consumer spending this year, particularly the spike in online shopping and buying local.
“Spending in local shops has obviously gone through the roof – I know when I've been to my local cafe at the weekends, they’ve really seemed busier…and, nicely, are employing people out of the local economy as well,” he tells Westpac Wire..
“And then secondly, I've seen customers who are coming into those shops really spending on local produce and local goods. So I think around the Christmas table this year, we'll see a lot of things that were grown here in Australia and under the tree, quite a few things that were made and purchased here in Australia as well.”
The planned local spending surge comes after the Westpac-Melbourne Institute sentiment index lifted further this month to a 10-year high as the economy continues to reopen and Australians spend some of the rush of savings that flowed into bank deposit accounts during the year.
Mr Burton says many of the trends like the shift to spending and transacting via digital channels will be permanent, and the increased saving levels and higher consumer sentiment boded well for the economy next year.
“With those extra buffers that people have in their bank accounts today, that stands us all in really good stead for the future,” he says.
The survey found almost half of consumers are less concerned about their Christmas budget this year, as it will be a more subdued affair. In addition, more than a third of consumers also said they’d do all their Christmas shopping online, reflecting a massive embrace of e-commerce during the pandemic propelling online shopping to historic highs, along with a surge in digital banking uptake.