Tuesday, June 18, 2024

Father’s Day gift spending impacted by cost of living

Australians are forecast to spend $735 million on Father’s Day gifts, according to new research. Purchases are, however, down 7.7% on last year’s projections, as the rising cost of living starts to impact consumers.

The research from the Australian Retailers Association (ARA) in collaboration with Roy Morgan shows that 36% of the Australians surveyed plan on buying a Father’s Day gift, down 4% on last year. Of those planning a gift purchase, 42% said the current cost of living challenges will impact how much they’ll spend.

Consumers are thinking more about sustainability when it comes to their purchases, with 55% planning to buy a gift that’s environmentally friendly.

Alcohol and food (28%) top the most popular purchases, ahead of clothing/footwear (18%) and gift cards/vouchers (14%).

ARA CEO Paul Zahra says while the spending forecasts are down on last year, it’s understandable given the current economic environment.

“There’s no doubt it’s an incredibly difficult period for many businesses and consumers as inflationary pressures take hold,” he says.

“Mortgage holders are under added financial stress with four interest rate hikes in a row, and with consumer confidence waning, it’s not a surprise to see the spending forecasts for Father’s Day down a bit this year.

“Retailers will still be encouraged by the projections with $735 million set to be spent in-stores and online. Alcohol and food including wine, spirits and confectionary, top the most popular items for dad as they normally do, while sustainability is on the minds of consumers with more than half planning to buy a gift that’s environmentally friendly.

“Father’s Day is the last gift-giving event before Christmas and provides retailers with a good barometer for how consumer discretionary spending is likely to track over the festive season. The concern is with inflation yet to peak, and cost of living challenges likely to worsen before they get better, consumers will be squeezed even further when it comes to their discretionary purchases.”

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