Black Friday weekend delivered for retailers with strong consumer spending and a return to stores.
Sales data shows Australian consumers have spent $4.97 billion in global sales, well below the forecast $6.2 billion, but still representing a 17 per cent increase on last year.
A change in consumer spending behaviour indicates, however, that they are seeking value for money as household discretionary spending becomes tighter.
“We saw shoppers bring forward their Christmas spending to November, leveraging promotional activities,” says Tyson Dujela, Grant Thornton Retail Industry Group partner.
“Consumers are making increasingly considered purchase decisions for bargains to save in the long run.”
This year Grant Thornton also noted buying behaviour shifting, with consumers returning to stores, making the most of their shopping experience after lengthy pandemic and lockdown-induced waiting periods, with the data showing a 29 per cent increase to in-store point of sale―or offline, bricks-and-mortar sales―compared to 2021.
“This shows consumers still want store experiences as they create an engaging, touch and feel, customer service driven retail experience with the instant gratification of buying products in person.
“The trend our retail industry group saw of consumers returning to stores isn’t to say that the online experience isn’t just as important. In this era of omnichannel retailing, retailers need to provide a consistent experience across all touchpoints, spanning from online channels to stores.”
This year was not immune to disruption. Retail, like most sectors, was impacted by price inflation, a tight labour market, cost pressures and a reduction in promotional activity.
Consumers who held record level household balance sheets a year ago are now more cautious with their spending as inflation, rising interest rates and impacts on the cost of living are front of mind, inevitably affecting retailers across all sub-sectors.
“We predict shoppers of high-end retailers may start going to more affordable stores if businesses don’t put measures in place to retain customers,” adds Dujela.
“Consumers are projected to reduce discretionary spending, prioritise essential goods and discount options. To combat impacts of changing spending habits, we encourage retailers to plan inventory carefully and consider how demand will impact your products.”
