Christmas spending on the decline as interest rates rise

ABC NEWS (Australia)

With just a week to go until Christmas Canberra shoppers seems to be spending less than usual. While there's no formal data yet, the business sector says higher interest rates mean demand is cooler than they're used to.

Transcript

00:00It's beginning to look a lot like Christmas, but while there are still toys in every store,

00:09how many are being walked out the door?

00:12With more money going on the essentials, like the groceries and where we live, Canberra's

00:17shoppers are doing their best to make it work.

00:20I've been working a bit recently just to save up some money so I can spend some on family

00:26and stuff.

00:27They're still quite small, so they enjoy a little crochet set or some of those small

00:34craft items that you can buy for five or six dollars.

00:37Retailers themselves have noticed wallets seem thinner than normal.

00:42Consumers are just not outspending in the way that we might have expected them to, and

00:46we think the cost of living pressures and the interest rate situation is really at the

00:50heart of that.

00:52With some shoppers still doing a mad dash in the week before the 25th, it seems others

00:57were strategic, getting in earlier and saving money in the process.

01:02Tried to grab the bargains and all the Black Fridays and the cyber things and all that,

01:06we jumped on board.

01:07Originally an American phenomenon, it seems Black Friday has well and truly arrived on

01:13Aussie shores.

01:14That's good for retail in that it's encouraging customers to get out and shop, but it does

01:19mean that margins are down.

01:21But those who missed out don't have long to wait before prices are slashed again.

01:26Boxing day is coming up, that's obviously a big part of the shopping calendar as well,

01:30but my expectation is you'll probably see quite a few sales rolling on into the new

01:35year.

01:36While consumers hoping for a special something from the Reserve Bank may be waiting a little

01:40while yet.

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