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Tight budgets not stopping consumers from spending

Tight budgets not stopping consumers from spending
Tight budgets not stopping consumers from spending

Amid the cost of living crisis, consumers still spend their money on retailers’ end-of-financial-year deals and promotions. 

The Australian Broadcasting Corporation (ABC) reports that economists are warning that the Reserve Bank of Australia (RBA) may hike interest rates again. This is mainly linked to the struggling retail sector, where ongoing sales encourage consumers to shop for bargains.

Retail spending has recently jumped

According to the Australian Bureau of Statistics, the latest figures released last week are driven mainly by the boost in clothing and footwear spending, offering discounts earlier than usual. 

In May 2024, the following increased consumer spending followed:

  • Food retailing rose by $102.3m.
  • Liquor trading experienced a massive 6.1% increase ($87.4m). 
  • Household goods retailing rose 1.1% ($62.2m).
  • Clothing, footwear, and personal accessory retailing rose 1.6% ($48.1m).

The RBA is meeting again in August. It remains uncertain whether it will lift the official cash rate to a new record high.   

Online sales have declined

The Bureau has noted a decline in online retail sales in May 2024 in seasonally adjusted terms. 

Total online retail sales in seasonally adjusted terms were more than $4 million, a drop of more than $100 million (2.4%). This follows a rise of 6.8 % ($270.4m) in April 2024. 

Rising costs and bills 

Rising costs in Australia, especially the electricity bills, have sent consumers and businesses into a frenzy. 

Australia’s “working poor” are struggling to pay their bills, especially with the high cost of electricity. This is revealed in the latest data from the National Debt Helpline. 

The New Sydney Morning Herald confirms that more Australians are turning to helplines for ideas to survive the financial crunch. Consumers are calling debt helplines leaving it inundated with financial counseling requests.

Up to 500 people use debt helplines daily, contributing to a 40% spike in phone calls from desperate citizens. 

NOW READ: How small businesses can adapt to rising energy costs

About the author

Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.

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