Thursday, June 20, 2024

Retail survey confirms consumers’ changing spending habits

The latest ‘Cost of Living and Consumer Deviance Spotlight’ report from Monash Business School’s Australian Consumer and Retail Studies (ACRS) group, provides “shocking” context to the cost-of-living crisis experienced by consumers. The key findings from the report indicated that consumers have changed their spending habits to “alleviate financial pressure and can justify certain deviant behaviours.”

Many Australians are offsetting increases to non-discretionary spending (e.g., housing, essential groceries, insurance) with decreases in discretionary spending (e.g., restaurant and takeaway meals, clothing, footwear and accessories) to meet the current costs of living.

ACRS lead researcher Stephanie Atto says the study asked shoppers about consumer confidence, non–discretionary and discretionary spending, and the justifiability of a range of behaviours given the current economic conditions.

“We wanted to understand if and how consumers are changing their spending habits to relieve these financial pressures, and how justifiable certain deviant behaviours such as retail theft, are to consumers in the current climate,” Ms Atto said.

Over a quarter of consumers surveyed believed that blatant forms of retail theft were ‘a little’ to ‘completely’ justifiable including these specific behaviours:

  • ‘Taking an item without paying’ (28%),
  • ‘Changing price tags on products’ (30%),
  • ‘Not scanning some items when using a self-checkout terminal’ (32%),
  • ‘Scanning items as cheaper items when using a self-checkout terminal’ (37%).

“Fears of opportunistic consumers have been growing amongst retail businesses who not only face the issue of decreasing consumer spend but also the need to be wary of consumers looking to save money through more deviant means,” Ms Atto said.

The survey identified that older consumers (55+ years of age), considered retail theft behaviours as ‘not at all’ justifiable compared to other age groups. While significantly more younger consumers (18–34 years of age) indicated that forms of theft are ‘a little’ to ‘completely’ justifiable.

More specifically, 93% of older consumer said ‘taking an item without paying for it’ was ‘not at all’ justifiable, compared to only 47% of younger consumers. The remaining 53% of younger consumers felt it was ‘a little’ to ‘completely’ justifiable. Similarly, ‘changing price tags on products’ was ‘not at all’ justifiable to 90% of older consumers compared to 45% of younger consumers.

The findings also indicate consumers are pessimistic about their current and future personal finances, as well as expectations of future business conditions.

Fifty per cent of consumers reported that they are financially worse off compared to a year ago, while two out of five consumers (42%) indicated it is a bad time to buy big ticket items such as furniture, refrigerators, and televisions.

“Much of the consumer financial pessimism and changes in spending habits has been attributed to inflation and expectations of ongoing rate increases, which will need to abate before any significant changes to consumer confidence can be seen,” Ms Atto said.

Amongst all age groups, consumers aged 35–54 were the most pessimistic about their current financial situations. With 57% of those aged 35 to 54 years reported being financially worse off compared to last year.

Additional results from the report show that 77% of consumers expect to be in the same financial position or worse off in the next 12 months. Nearly half of consumers (49%) expect poor business conditions over the next 12 months and over a third (37%) expect poor business conditions over the next five years.

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